Question

A chain of motels had adopted a policy of giving a 3% discount to customers who pay in cash rather than by credit cards. Its experience is that 30% of all customers take the discount. Let Y = the number of discount takers among the next 20 customers.

What kind of probability distribution is appropriate in this case?
a) Normal Distribution
b) Binomial Distribution
c) Poisson Distribution
d) Unknown Discrete Probability Distribution

Answer 1

The binomial distribution is the correct choice for calculating the probability of a certain number of customers out of a fixed total taking a discount, given a constant probability of discount uptake. Therefore correct option is B

Step-by-step explanation:

The appropriate probability distribution in the case of determining the number of customers who will take a discount out of the next 20 customers, given that 30% of all customers take the discount, is the binomial distribution. The binomial distribution is used when there are a fixed number of independent trials (in this case, 20 customers), each of which results in a success or a failure (taking the discount or not), with a constant probability of success (30%).