Answered: Demand for residential electricity at a…

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 8MC

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Question

15	Demand for residential electricity at a certain time period in Hamilton County is normally distributed with

a mean of

μ =

5595

megawatts (MW)

and a standard deviation of

σ =

405

Due to scheduled maintenance and unexpected system failures in a generating station, the utility company can

supply a maximum of

x =

6200

The probability that the utility will have to purchase electricity from other utilities or allow brownouts is ______.
0.0974
0.0811
0.0676
0.0563

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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