A California water company has determined that the average customer billing is ​$1,100 per year and the amounts billed have an exponential distribution. a. Calculate the probability that a randomly chosen customer would spend more than ​$ 4,000. b. Compute the probability that a randomly chosen customer would spend more than the average amount spent by all customers of this company.

Respuesta :

We can solve this problem through exponential distribution.

We have that,

[tex]\mu = \frac{1}{\lambda} = 1100[/tex]

clearing for \lambda we have

[tex]\lambda = \frac{1}{1100}[/tex]

The exponential distribution is given by,

[tex]P(x) = 1-e^{-\lambda x}[/tex]

a) We define our probability for x>4000, that is,

[tex]P(x>4000) = 1- [1-e^{-\frac{4000}{1100}}][/tex]

[tex]P(x>4000) = e^{3.6363}[/tex]

[tex]P(x>4000) = 0.02634[/tex]

b) We define our probability for x>1100, that is

[tex]P(x>1100) = 1- [1-e^{-\frac{1100}{1100}}][/tex]

[tex]P(x>1100) = e^{-1}[/tex]

[tex]P(x>1100) = 0.3679[/tex]