Nevermind, I've found the solution! Link is here:
http://www.math.uiuc.edu/~hildebr/37...etest1-08s.pdf
Problem #8
Simple problem, but I'm getting the wrong answer.
A tour bus operator sells 21 tickets for a bus with 20 seats. The probability of a person showing up is 0.98. If a person shows up and there are no available seats, he is given $100.
The price of a ticket is $50. What's the expected revenue?
I used expected value mindlessly, which gave the wrong answer. The more I think about it, the more I realize that this is a problem that is going to involve a random variable, but I'm not sure how to begin. Any help? Thanks!
Nevermind, I've found the solution! Link is here:
http://www.math.uiuc.edu/~hildebr/37...etest1-08s.pdf
Problem #8