Question

X(Product) Cinnamon Roll Donut Crossiant
P(X) 0.20 0.55 0.25


a) If a cinnamon roll yields $0.25 profit, a donut yields $0.20 profit, and a croissant yields $0.30 profit, how much profit will be made on each customer?

b) If there are 50 customers, how much money can you expect her to make?

Answer 1

a) is asking you to find the expected value

b) is asking you to multiply what you found in part a) by 50

Answer 2

could you help me find the value of part a pleas? im not sure I understand how?

Answer 3

The expected value is the sum of all the probabilities multiplied by the values of each outcome.

Basically, you multiply P(X = cinnamon roll) by V(X = cinnamon roll)

So you would get 0.20 times 0.25 = 0.05

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You do the same for the other probabilities and profits

For the donuts, you do 0.55*0.20 = 0.11

For the croissants, you do 0.25*0.30 = 0.075


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now you add up the three results you got above: 0.05, 0.11, 0.075

to get

0.05 + 0.11 + 0.075 = 0.235

Answer 4

So the expected value of X is 0.235

This means they expect to make (on average) $0.235 which rounds to $0.24 per customer

Answer 5

So $0.24 is made per customer

Then you take this result and you multiply it by 50 to get the answer to part b

Answer 6

Thank you so much! (:

Answer 7

you're welcome

Answer 8

So, it would be 0.24x50? which equals 12?

Answer 9

correct

Answer 10

so she expects to make (on average) $12 for 50 customers

Answer 11

Okay, it makes sense to me now! Thanks so much!

Answer 12

sure thing, and glad it does