SOLUTION: You are selling T-shirts at an outdoor concert. You are expecting to make a profit of $800.However, if it rains, the concert will be cancelled and you will lose $200. If there is a

Question 958939: You are selling T-shirts at an outdoor concert. You are expecting to make a profit of $800.However, if it rains, the concert will be cancelled and you will lose $200. If there is a 30% chance of rain the day of the concert, what is the expected value of your profit?
A. -$200
B. $500
C. $600
D. $800
Answer by jim_thompson5910(35256) (Show Source): You can put this solution on YOUR website!
P(Rain) = 0.30
P(No Rain) = 0.70 ... note: 1-0.30 = 0.70

V(Rain) = -200 ... this is the value you get if it rains
V(No Rain) = 800

E(X) = P(Rain)*V(Rain) + P(No Rain)*V(No Rain)
E(X) = 0.30*(-200) + 0.70*800
E(X) = 500

The expected value of the profit is $500

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