In a final round of a MegaMillion TV show a contestant has a won $1 million and has a chance of doubling the reward. If he loses his winnings drop to $500,000. The contestant thinks his chances of winning is 50%. Should he play? What is the lowest probability of a correct guess that will make his bet profitable?
In a final round of a MegaMillion TV show a contestant has a won $1 million and has a chance of doubling the reward. If he loses his winnings drop to $500,000. The contestant thinks his chances of winning is 50%. Should he play? What is the lowest probability of a correct guess that will make his bet profitable?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter17: Making Decisions With Uncertainty
Section: Chapter Questions
Problem 17.2IP
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In a final round of a MegaMillion TV show a contestant has a won $1 million and has a chance of doubling the reward. If he loses his winnings drop to $500,000. The contestant thinks his chances of winning is 50%. Should he play? What is the lowest probability of a correct guess that will make his bet
profitable? Please show your work.
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