Question

T2. Two restaurants compete against one another for a pool of 10,000 local potential patrons. Assuming people tend to choose between the two restaurants at random and independently, use a binomial model to find how many seats S our restaurant should have such that the probability of turning a customer away due to being at capacity is less than 1%.

Answer 1

let X denote the number of customer our restaurant recieved

p= Probability of success = 0.5

q= Probability of failure = 1- 0.5 =0.5

Number of trials , n= 10000

since X follows binomial distribution and for large values of n it is approximated by Normal distribution