The enrollment in a course offered by the College of Business is random and is d

Question

The enrollment in a course offered by the College of Business is random and is described by the following probability distribution: there is a 15% chance of 17 students, 21% chance of having 25 students, 30% chance of having 36 students, and otherwise there are 45 students. Suppose it costs the university $5600 to offer a section of a class (regardless of the number of students enrolled - so this is a "fixed cost") and tuition is $330 per student per class. What is the expected profit or loss for the University on this class?

Explanation / Answer

here from above:

from above expected students =33.90

threfore   expected profit or loss =expected income-cost =33.9*300-5600=$5587

y p(y) yP(y) 17 0.1500 2.550 25 0.2100 5.250 36 0.3000 10.800 45 0.34 15.300 total 1 = 33.90

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