Question 145174
A charitable organization is raffling a car worth $20,000 to raise money and needs to decide which of the following scenarios would be the most profitable based on expected value of the proposed game.  

Case A:  150 tickets are sold at $200.00 each.
Case B: 75 tickets are sold at $500 each.

1.  Determine the expected value for the winnings of the players in Case A.
Random variable values for "gain" are 20,000 and -200
Corresonding probabilitites are 1/150 and 149/150
E(X) = 20,000(1/150) + (-200)(149/150) = -$65.33
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2.  Determine the expected value for the winnings of the players in Case B.
X values: 20,000 and -500
P(X) values: 1/75 and 74/75
E(X) = 20,000(1/75) + (-500)(74/75) = -$266.67
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3.  Based on the expected values, which game would potentially raise more for the organization?  Why?
Plan B because the greater expected loss for the player assures that
the organization has a higher expected gain.
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  Are there any factors other than expected value that should be considered in this decision?
I'll leave that to you.  You might consider the risk involved in trying to 
market $500 tickets compared to the risk of selling $200 tickets.

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Cheers,
Stan H.