Suppose that 30% of all students who have to buy a text for a particular course want a new copy, whereas the other 70% want used copy. Consider randomly selecting 25 purchasers.
a). What are the mean value and standard deviation of the number who want a new copy of the book?
b). What is the probability that the number who want new copies is more than two standard deviations away from the mean value?
c). The bookstore has 15 new copies and 15 used copies in stock. If 25 people come in one by one to buy this text, what is the probability that all 25 will get the type of they want from the current stock? (Hint: let X = the number who want a new copy. For what values of X will all 15 get what they want?
d). Suppose that new copies cost $100 and used copies cost $70. Assume the bookstore currently has 50 new copies and 50 used copies. what is the expected value of total revenue from the sale of the next 25 copies purchased?
Be sure to indicate the rule of expected value you are using. [hint: let h(X) = revenue when X of the 25 purchasers want new copies. Express this as linear function.]
The probability of students buying a new book is determined. The rules of expected values that are being used are included.