The City of Minneapolis is deciding whether to install a stoplight or a stop sign at a very dangerous intersection. Every time a car goes through the intersection, it either is safe, gets in a minor accident, or gets in a major accident. The stoplight would prevent crashes more often, but they would be more costly if they did occur. The City of Minneapolis performs 800 simulations of a car going through the intersection with a stoplight and with a stop sign. Once they decide whether to install a stoplight or a stop sign, they expect 4000 cars to travel through the intersection in the next year.
What is the expected damage at this intersection in the next year if the City of Minneapolis installs a stoplight?
What is the expected damage at this intersection in the next year if the City of Minneapolis installs a stop sign?
To minimize the expected damage, The City of Minneapolis should install a: