#1
Suppose that the time spent each month on a mobile-phone by a subscriber with a particular profile is normally distributed with a mean of 175 minutes and a standard

deviation of 45 minutes.

A mobile-phone operator offers the subscriber a monthly flat rate plan:

• 90 minutes’ use or less costs \$35

• between 90 minutes’ and 240 minutes’ use costs \$60

• more than 240 minutes’ use costs \$75.

Question 1:

Assuming that the subscriber’s use of the phone does not change, calculate the mean and standard deviation of the subscriber’s monthly charges.

Question 2:

Why is the assumption that the use will not change unrealistic?