Question

It costs a bakery $6 to bake a cake. If it sells on the first day, the bakery charges $15. If it sells on the second day, it charges $9. Otherwise, the cake is thrown out. The chance that a cake will sell on the first day is 65% and the chance that it will sell on the second day is 23%. How much profit (or loss) will the bakery make on each cake?

Answer 1

Answer on Question #75622 – Math – Statistics and Probability

Question

It costs a bakery $6 to bake a cake. If it sells on the first day, the bakery charges $15. If it sells on the second day, it charges $9. Otherwise, the cake is thrown out. The chance that a cake will sell on the first day is 65% and the chance that it will sell on the second day is 23%. How much profit (or loss) will the bakery make on each cake?

Solution

$$E(X) = \sum p_i x_i = 0.65 * 9 + 0.23 * 3 + 0.12(-6) = \$5.82.$$

Answer: $5.82.

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