Question

A car delearship sells only 5 models of cars. Over time, they have identified the probability of a customer buying a car. They only sell for the sticker price, no negotiating. . The probability distribution for the purchases of customers visiting the dealership is given below.

Model A B C D E No Sale

Price $20,000 $22,000 $25,000 $30,000 $40,000 $0

Probability 0.04 0.07 0.11 0.03 0.02 0 .73

a) (3 pts) Make a probability distribution for a worker’s comission, if the comission rate is 10%.

b) (3 pts) How much can a salesperson expect to earn by waiting on a random customer?

Answer 1