# Standard Deviation of pricing for Mercedes CLK350 vs BMW 3

Suppose Mercedes is concerned that dealer prices of the CLK350 Coupe are not consistent and that even thought the average price is $44,520, actual prices are normally distributed with a standard deviation of $2981. Suppose also that Mercedes believes that at $43,000, the CLK350 coupe is priced out of the BMW 3 series Coupe 335i market.

What percentage of the dealer prices for the Mercedes CLK350 Coupe is more than $ 43,000 and hence priced out of the BMW 3 series coupe 335i market? The average price for a BMW 3 series coupe 335i is $39,368.

Suppose these prices are also normally distributed with a standard deviation of $2367. What percentages of BMW dealers are pricing the BMW 3 series coupe 335i at more than average price for a Mercedes CLK350 Coupe? What might this mean to BMW if dealers were pricing the 3 Series Couple 351 at this level? What percentages of Mercedes dealers are pricing the CLK350 Couple at less than the average price of a BMW 3 Series coupe 335i?

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#### Solution Preview

Suppose Mercedes is concerned that dealer prices of the CLK350 Coupe are not consistent and that even thought the average price is $ 44,520, actual prices are normally distributed with a standard deviation of $ 2981. Suppose also that Mercedes believes that at $43,000, the CLK350 coupe is priced out of the BMW 3 series Coupe 335i market.

What percentage of the dealer prices for the Mercedes CLK350 Coupe is more than $ 43,000 and hence priced out of the BMW 3 series coupe 335i market?

Let X be the price of CLK350 Coupe, so ...

#### Solution Summary

The expert determines the standard deviation of pricing for Mercedes CLK350 versus BMW 3.