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Thread: Expected Value

  1. July 23rd 2011, 05:29 PM #1
    arcketer
    arcketer is offline
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    Expected Value

    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!
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  2. July 23rd 2011, 06:47 PM #2
    arcketer
    arcketer is offline
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    Re: Expected Value

    Nevermind, I've found the solution! Link is here:

    http://www.math.uiuc.edu/~hildebr/37...etest1-08s.pdf

    Problem #8
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