Question 322467
if a man purchases a lottery ticket, he can win a first place prize of 45000 or a second place prize of $2000 with probabilities of 0.001 and 0.003. What should be the price of one ticket?
------------------------------------------
Expected gain = 0.001*45000 + 0.003*2000 = $51
---------------
For the game to "fair" they should pay $51 to play the game.
=================
Cheers,
Stan H.