Posted by Martha on .
At a fair run by a local charity organization, it costs 50 cents to try one's luck in drawing an ace from a deck of 52 playing cards. What is the expected profit per customer if they pay $4 if and only if a person draws an ace.
I am sorry that nobody has responded to your post earlier.
The probability of geting an ace is 4/52. The probability of not getting an ace is 48/52. They will receive $.50 every time a person draws, but lose $4 4 times in 52. Thus, by chance, they will gain $26 and lose $16 over 52 customers. Dividing the different between these two amounts by the number of customers will give you the "expected profit per customer."
I hope this helps. Thanksfor asking.