Suppose that the fuel price at a specific gas station consistsof :
A fixed government fuel excise of $0.416/L
Wholesale costs for supplier, which average $0.712/L, with avariance of 0.10.
Retail costs (including profit margin) at an average of$0.212/L, with a variance of 0.0012.
a) Find the average total fuel cost on any given day
b) Given that wholesale and retail costs have a correlation of0.7, find the variance in total fuel price
c) Assuming that the total fuel price is normally distributed,what is the probability of fuel being priced at less than $1/L onany given day?
