   Chapter 9.1, Problem 37E ### Calculus: An Applied Approach (Min...

10th Edition
Ron Larson
ISBN: 9781305860919

#### Solutions

Chapter
Section ### Calculus: An Applied Approach (Min...

10th Edition
Ron Larson
ISBN: 9781305860919
Textbook Problem
1 views

# Market Analysis A sporting goods company has decided on two possible cities in which to open a new store. Management estimates that City 1 will yield $20 million in revenues if successful and will lose$4 million if not. whereas City 2 will yield $50 million in revenues if successful and will lose$9 million if not. City 1 has a 0.3 probability of being successful and City 2 has a 0.2 probability of being successful. In which city should the sporting goods company open the new store with respect to the expected return from each store?

To determine

To calculate: In which city should the sporting goods company open the new store with respective to the expected return from each store.

Explanation

Given Information:

City 1 will yield 20 million in revenues if successful and will lose $4 million if not and city 2 will yield 50 million in revenues if successful and will lose$9 million if not. The probability of being successful of city 1 has 0.3 and the probability of being successful of city 2 has 0.2.

Formula Used:

If x1 be the gain of successful with probability p(x1) and x2 be the loss of failure with probability p(x2) then

E(x)=x1p(x1)x2p(x2)

Step-1: Find the expected value of the city 1 and city 2.

Step-2: Compare which one amount is more.

Calculation:

Consider the given conditions for City 1

x1=20millionx2=\$4millionp(x1)=0.3p(x2)=10.3

And,

p(x2)=0.7

Now, apply the formula to find the probability

E(x)=x1p(x1)x2p(x2)=20(0

### Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

#### The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

#### In Exercises 4562, find the values of x that satisfy the inequality (inequalities). 62. 2x1x+24

Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach

#### In problems 23-58, perform the indicated operations and simplify. 43.

Mathematical Applications for the Management, Life, and Social Sciences

#### Rewritten as an iterated integral in polar coordinates,

Study Guide for Stewart's Multivariable Calculus, 8th

#### True or False: f(x) = 10x − x2 is increasing on (4,8).

Study Guide for Stewart's Single Variable Calculus: Early Transcendentals, 8th

#### What is the general purpose of a manipulation check?

Research Methods for the Behavioral Sciences (MindTap Course List) 