You recently purchased a stock that is expected to earn 22 percent in a booming economy, 11 percent in a normal economy, and los
1 answer:
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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
Answer:
B
Explanation:
First, a monopoly produce less than the socially efficient quantity because as the figure shows, the quantity produced is determined by the intersection between the marginal cost curve (MC) and the marginal revenue curve (MR) and not by the intersection between the MC and the demand. For instance, there is a deadweight loss (shown by the figure).
Second, equilibrium price is always higher than in a competitive market because is always higher than the MC. The price is determined by the equilibrium quantity (found before) and the demand. Also, there are barries to entry and so monopolist have always price control.
