Rom can you please look at this for me?
Jtbreezii, if you want to ask a new question you need to make a new post.
But I am interested in this one. I think it is confusing too.
A manufacturer of phones realizes a profit of $350 for each telephone sold. However, defective phones can not be sold and cost $700 to produce. Find the expected profit if the probability that a phone is defective is 2.5%
Say the company makes 1000 phones 2.5% of them are faulty
2.5% of 1000=25 phones
So they have really only made 1000-25=975 phones that will be sold
The cost to make them was 700*1000 = $700 000 (even the faulty ones had to be made.) [don't actually need this]
The expected profit on a production of 1000 is $350*975 = $341 250 (Remember that only 975 of them are sold.)
Expected profit on each phone is $341 250 / 1000 = $341.25
Rom I do not understand why you would take away $17.50 from this ???????????
Rom's answer is different from mine and I would believe Rom over me.