A manufacturer of phones realizes a profit of $150 for each telephone sold. However, defective phones can not be sold and cost $300 to produce. Find the expected profit if the probability that a phone is defective is 2%.

Guest Oct 28, 2015

#3**+5 **

A manufacturer of phones realizes a profit of $150 for each telephone sold. However, defective phones can not be sold and cost $300 to produce. Find the expected profit if the probability that a phone is defective is 2%.

Hi Guest, I do not think that your answer is quite right :/

Say x phones are produced.

98% of those are expected to be good so the profit on these will be 0.98*x*$150 = $147x

BUT

2% will bew no good so these will reduce the profit by 0.02*300*x = $6x

So the profit will be (147-6) x= $141x

That is, the expected profit per phone is expected to be $141

Melody
Oct 28, 2015

#2**+4 **

A manufacturer of phones realizes a profit of $150 for each telephone sold. However, defective phones can not be sold and cost $300 to produce. Find the expected profit if the probability that a phone is defective is 2%.

Let x be the number of phones sold, so:

then the profit margin should be:

150x - (.02x X 300),

150x - 6x=144x, therefore the profit margin will be:

144x/150=.96 X 100=96% of the expected $150 price per phone.

Guest Oct 28, 2015

#3**+5 **

Best AnswerA manufacturer of phones realizes a profit of $150 for each telephone sold. However, defective phones can not be sold and cost $300 to produce. Find the expected profit if the probability that a phone is defective is 2%.

Hi Guest, I do not think that your answer is quite right :/

Say x phones are produced.

98% of those are expected to be good so the profit on these will be 0.98*x*$150 = $147x

BUT

2% will bew no good so these will reduce the profit by 0.02*300*x = $6x

So the profit will be (147-6) x= $141x

That is, the expected profit per phone is expected to be $141

Melody
Oct 28, 2015