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Olegator [25]
3 years ago
10

A producer plans an outdoor concert for the weekend. The cost of the concert is $8,000 which includes advertising, security, pri

nting, tickets, etc. The producer plans to profit $15,000 if all goes well. However, it it rains, the concert will be canceled. The chance of rain is 0.3 according to the weather report. Find the producer’s expected profit.
Mathematics
1 answer:
andrey2020 [161]3 years ago
3 0

Answer: $8,100

Step-by-step explanation:

If it does not rain, the producer stands to make a profit of $15,000.

If it rains, the producer will lose the $8,000 they invested.

The chance of rain is 0.3 which means the chance it does not rain is 0.7.

Producer's expected profit is the weighted average of these outcomes;

= (15,000 * 0.7) + ( -8,000 * 0.3)

= 10,500 + ( - 2,400)

= $8,100

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