Question 7.EX.22: The lifetime of a car has a distribution H and probability d......

Introduction to Probability Models [1575943]

The lifetime of a car has a distribution H and probability density h. Ms. Jones buys a new car as soon as her old car either breaks down or reaches the age of T years. A new car costs $C_{1}$ dollars and an additional cost of $C_{2}$ dollars is incurred whenever a car breaks down. Assuming that a T -year-old car in working order has an expected resale value R(T ), what is Ms. Jones’ long-run average cost?

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