Question

In a recent year, the average daily circulation of the Wall Street Journal was 2,276,207. Suppose the standard deviation is 70,940. Assume the paper’s daily circulation is normally distributed.

(a) On what percentage of days would circulation pass 1,825,000?
(b) Suppose the paper cannot support the fixed expenses of a full-production setup if the circulation drops below 1,634,000. If the probability of this even occurring is low, the production manager might try to keep the full crew in place and not disrupt operations. How often will this even happen, based on this historical information?

(Round the values of z to 2 decimal places. Round your answers to 4 decimal places.)

(a) P(x > 1,825,000) =
(b) P(x < 1,634,000) =

Answer 1

Let X denote the daily circulation of the Wall Street Journal. Then

a)

So, on almost 100% of the days, the circulation would pass 1,825,000.

b)

So, on almost 0% of the days, the paper cannot support fixed expenses.

This probability of this event is approximately 0, hence quite unlikely.