Question 2
1 answer:
Answer:
The answer is below
Explanation:
Probability distribution are statistical function that shows all the possible outcomes of a random variable within a given range of values.
a) The mean () of a probability distribution of a discrete random variable is:
= (0 * 0.8) + (1 * 0.15) + (2 * 0.04) + (3 * 0.01) = 0.26
b) The standard deviation (σ) of a probability distribution of a discrete random variable is:
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Answer:
Explanation:
The purpose of allocating the output of the shoes is to diminish the total cost of production. The process is achieved by assigning a pair of shoes that requires production at the factory with a marginal lower cost of the two plants. Afterward, the firms will have to equate the marginal cost of production across the two firms.
For firm 1:
The cost of production
Differentiating with respect to to determine the marginal cost;
For firm 1, the Marginal cost
For firm 2; the marginal cost
Equating both from above:
Recall that:
Thus, we can replace the value of into the above equation to determine the value of
in terms of
by applying a quadratic formula.
Assuming we knew the values of we can estimate the numerical value of
, then replace it into the equation
to find the numerical value for
.