Question

[9:18:45 AM] chande: The owner of a antiques store estimates that there is a 45% chance she will make $2400 when she sells a antique china cabinet and a 10% percent chance she will make $1800 when she sells the cabinet and a 45% chance she will break even when she sells the cabinet. Determine the expected gain or loss for the store.

Answer 1

The sale event can happen in three different and mutually exclusive ways. Therefore the probability of a gain is the sum of the two probabilities that result in a gain:
p (gain) = 45 + 10 = 55%
There is no probability of a loss, the reason being that none of the three ways of selling results in a loss.