Question

The Energy Information Administration records the price of electricity in the United State each month. In July 2013, the average price of electricity was 11.92 cents per kilowatt-hour. Suppose that the standard deviation is 2.1 cents per kilowatt-hour. What can you determine about these data by using Chebyshev's Inequality with K=3?

Answer 1

Answer:

89% of the time that average price of electricity is expected to be in the interval from 5.62 cents per kw-h to 18.22 cents per kw-h

Step-by-step explanation:

Chebyshev's inequality states that:

When K = 2, 75% of the data is within two standard deviations of the mean

When K = 3, 89% of the data is within 3 standard deviations of the mean

In this problem, we have that:

Mean = 11.92 cents per kw-h

Standard deviation = 2.1 cents per kw-h

What can you determine about these data by using Chebyshev's Inequality with K=3?

3 standard deviations below the mean

11.92 - 3*2.1 = 5.62 cents per kw-h

3 standard deviations above the mean

11.92 + 3*2.1 = 18.22 cents per kw-h

So you can determine that 89% of the time that average price of electricity is expected to be in the interval from 5.62 cents per kw-h to 18.22 cents per kw-h