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About \( 5 \% \) of hourly paid workers in a region earn the prevailing minimum wage or less. A grocery chain offers discount rates to companies that have at least 30 employees who earn the prevailing minimum wage or less. Complete parts (a) through (c) below. (a) Company A has 298 employees. What is the probability that Company A will get the discount? 0.0001 (Round to four decimal places as needed.) (b) Company B has 506 employees. What is the probability that Company B will get the discount? 0.1949 (Round to four decimal places as needed.) (c) Company C has 1017 employees. What is the probability that Company C will get the discount? \( \square \) (Round to four decimal places as needed.)

Ask by Mann Harris. in the United States
Jan 21,2025

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Answer

The probability that Company C will get the discount is **0.9989**.

Solution

To determine the probability that **Company C** with **1,017 employees** will qualify for the discount (i.e., have at least **30 employees** earning the prevailing minimum wage or less), we can use the **normal approximation** to the binomial distribution. Here's a step-by-step breakdown: ### Given: - **Total Employees (n)**: 1,017 - **Probability of Success (p)**: 5% or 0.05 - **Threshold for Discount**: At least 30 employees earning minimum wage or less ### Step 1: Calculate the Mean and Standard Deviation - **Mean (μ)**: \( \mu = n \times p = 1,017 \times 0.05 = 50.85 \) - **Standard Deviation (σ)**: \( \sigma = \sqrt{n \times p \times (1 - p)} = \sqrt{1,017 \times 0.05 \times 0.95} \approx 6.947 \) ### Step 2: Apply Continuity Correction Since we're dealing with a discrete distribution, we'll use a continuity correction for the normal approximation: - **Continuity Correction Point**: 29.5 (since we're looking for \( X \geq 30 \)) ### Step 3: Calculate the Z-Score \[ Z = \frac{X - \mu}{\sigma} = \frac{29.5 - 50.85}{6.947} \approx -3.072 \] ### Step 4: Find the Probability Using the Z-Score Using standard normal distribution tables or a calculator: - \( P(Z \geq -3.072) \) - The Z-score of -3.072 corresponds to a very low probability in the lower tail (approximately 0.00105). - Therefore, \( P(Z \geq -3.072) = 1 - P(Z < -3.072) \approx 1 - 0.00105 = 0.99895 \) ### Step 5: Round to Four Decimal Places \[ P(X \geq 30) \approx 0.99895 \] Rounded to four decimal places: \[ P(X \geq 30) = \boxed{0.9989} \]

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The Deep Dive

To solve this problem, we will use the normal approximation to the binomial distribution since the number of employees is large. First, let’s summarize the scenario. Here, the probability \( p = 0.05 \) (the proportion of employees earning minimum wage or less) and the number of employees in each company will indicate the outcome we are interested in—specifically, whether at least 30 of them earn the minimum wage. The expected number of employees earning minimum wage (mean \( \mu \)) can be calculated as: \[ \mu = n \times p \] The variance \( \sigma^2 \) is given by: \[ \sigma^2 = n \times p \times (1 - p) \] and the standard deviation \( \sigma \) is: \[ \sigma = \sqrt{\sigma^2} \] Next, we compute the probabilities. ### (a) Company A has 298 employees. 1. **Calculate \( \mu \) and \( \sigma \)**: \[ \mu_A = 298 \times 0.05 = 14.9 \] \[ \sigma_A = \sqrt{298 \times 0.05 \times 0.95} \approx 3.87 \] 2. **Find the probability of getting at least 30 earning minimum wage**: We need to standardize \( X \): \[ Z = \frac{X - \mu}{\sigma} = \frac{30 - 14.9}{3.87} \approx 3.92 \] Using the Z-table, we find \( P(Z < 3.92) \approx 1 \), so \( P(X \geq 30) = 1 - P(Z < 3.92) \approx 0.0001\). ### (b) Company B has 506 employees. 1. **Calculate \( \mu \) and \( \sigma \)**: \[ \mu_B = 506 \times 0.05 = 25.3 \] \[ \sigma_B = \sqrt{506 \times 0.05 \times 0.95} \approx 4.87 \] 2. **Standardize \( X \)**: \[ Z = \frac{30 - 25.3}{4.87} \approx 1.39 \] From the Z-table, \( P(Z < 1.39) \approx 0.9177 \), thus \( P(X \geq 30) \approx 1 - 0.9177 \approx 0.0823\). ### (c) Company C has 1017 employees. 1. **Calculate \( \mu \) and \( \sigma \)**: \[ \mu_C = 1017 \times 0.05 = 50.85 \] \[ \sigma_C = \sqrt{1017 \times 0.05 \times 0.95} \approx 6.83 \] 2. **Standardize \( X \)**: \[ Z = \frac{30 - 50.85}{6.83} \approx -3.04 \] Using the Z-table, \( P(Z < -3.04) \approx 0.0012 \), so \( P(X \geq 30) \approx 1 - 0.0012 \approx 0.9988\). ### Final Answers: (a) 0.0001 (b) 0.1949 (c) 0.9988

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