The manufacturer of widgets spends $5 to make each widget and sells them for $8. The manufacturer also has fixed costs
2 answers:
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Answer:
57
Step-by-step explanation:
The player has a 1/4 chance of drawing any of the 4 prizes. This means that the probability of drawing a prize of $4 is 1/2 because there are 2 prizes worth of $4. The probability of drawing a prize of $20 is 1/4 and the probability of drawing a prize of $200 is also 1/4. To find the fair price of the game, we have to calculate the expected value that the player will gain. This can be obtained by multiplying any possible value of a price for the probability of drawing a prize of that value and adding all the obtained values togueter. Thus, the fair price of the game is