A lottery has one $1000000 prize, two $50000 prizes, ten $1000 prizes, and two hundred $50 prizes. There are to be one milllion tickets sold. How much pofit does the lotto company make if they sell the tickets for $2.00 each?

Answer 1

P(x) of 1000000 is 1/1000000
P(x) of 50000 prize is 2/1000000
P(x) of 1000 prize ia 10/1000000
P(x) of 50 prize is 200/1000000

P(x)=p

Find E(x) for each one

E(x)= n.p

Then add all E(x) values to find the expected value of all prizes for one ticket

Finally, that that total and multiply it by the cost of the ticket which is 2 dollars.

This will give you the expected profit

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Answer 2

Oh also n is the total number of tickets which in this case is 1000000