Answer:
The production level that maximizes Silky's profit is ties.
Explanation:
Hi
First of all, as we have , we need to transcript it as price in function of the quantity so
Then we need to find income function that is . After derivate it
.
The optimum level is when we have , therefore,
, as we clear it for
we find that
, finally as we have that
is measured in hundreds of ties, the production level that maximizes Silky's profit is
ties.
We expect to lose $0.37 per lottery ticket
<u>Explanation:</u>
six winning numbers from = { 1, 2, 3, ....., 50}
So, the probability of winning:
The probability of losing would be:
P(loss) = 1 - P(win)
According to the question,
When we win, then we gain $10 million and lose the cost of the lottery ticket.
So,
$10,000,000 - 1 = $9,999,999
When we lose, then we lose the cost of the lottery ticket = $1
The expected value is the sum of the product of each possibility x with its probability P(x):
E(x) = ∑ xP(x)
Thus, we expect to lose $0.37 per lottery ticket
