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The lifetime of a car is uniformly distributed between 2 and 6 years. Mr. Jones buys...

The lifetime of a car is uniformly distributed between 2 and 6 years. Mr. Jones buys a new car as soon as her old car breaks down or reaches the age of t years. Suppose that a new car costs $3000, and an additional cost of $500 is incurred if a car breaks down. Assume that an t-year old car has a resale value of R(t) = 3000−500t dollars. What value of t minimizes Mr. Jones’ long-run average cost?

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