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Fills in a random hour
In a quiet hour, which has probability , the number of fills is Poisson with mean . In a busy hour, with probability , it is Poisson with mean . What is the variance of the number of fills in a randomly chosen hour?
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Hint
A Poisson count has variance equal to its mean; then apply the total variance decomposition.
Solution
- The average within-hour variance equals the average mean, .
- The means and are equally likely, so their variance is .
- The total variance is .
Answer: