If You Add Several Normally Distributed Random Numbers,the Result Is

question 30

Essay

If you add several normally distributed random numbers,the result is normally distributed,where the mean of the sum is the sum of the individual means,and the variance of the sum is the sum of the individual variances.This result is difficult to prove mathematically,but it is easy to demonstrate with simulation.To do so,run a simulation where you add three normally distributed random numbers,each with mean 100 and standard deviation 10.Your single output variable should be the sum of these three numbers.Verify with @RISK that the distribution of this output is approximately normal with mean 300 and variance 300 (hence,standard deviation = 17.32).

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive in the market, reflecting extra benefit or profit.

Gain In Producer Surplus

An increase in the difference between what producers are willing to accept for a good versus what they actually receive.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from the production and consumption of a good or service.

Chocolate Market

The economic marketplace that encompasses the production, distribution, and sale of chocolate products.