Question 1150251
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You have received three responses, all showing how to find the expected value based on the formal definition of expected value.<br>
For many basic expected value problems like this, there is an easier way to find the expected value.<br>
To the people buying the tickets, the total cost is 500 times $7, or $3500.<br>
The total value of the prizes is $1000, plus 2 times $200, plus 14 times $10, for a total of $1540.<br>
The expected value for each ticket is the difference between the total payout and the total cost, divided by the number of tickets:<br>
{{{(1540-3500)/500 = -1960/500 = -3.92}}}<br>
ANSWER: The expected profit from each ticket is -$3.92.<br>