Answer:
The taxi drivers average profit per trip is $9.50.
Step-by-step explanation:
The taxi driver provides services in Zone A and Zone B.
Let = destination is in Zone A and = destination is in Zone B.
<u>Given:</u>
The probabilities are:
The Expected profit are:
If the trip is entirely in Zone A the expected profit is, E (A - A) = $7.
If the trip is entirely in Zone B the expected profit is, E (B - B) = $8.
If the trip involves both the zones the expected profit is,
E (A - B) = E (B - A) = $12.
Determine the expected profit earned in Zone A as follows:
Determine the expected profit earned in Zone B as follows:
The total expected profit is:
Thus, the taxi drivers average profit per trip is $9.50.