In: Statistics and Probability
Digitalis is a technology company that makes high-end computer
processors. Their newest processor, the luteA, is...
Digitalis is a technology company that makes high-end computer
processors. Their newest processor, the luteA, is going to be sold
directly to the public. The processor is to be sold for
$3600
, making Digitalis a profit of
$396
. Unfortunately there was a manufacturing flaw, and some of
these luteA processors are defective and cannot be repaired. On
these defective processors, Digitalis is going to give the customer
a full refund. Suppose that for each luteA there is an
11%
chance that it is defective and an
89%
chance that it is not defective.
If Digitalis knows it will sell
many of these processors, should it expect to make or lose money
from selling them? How much?
To answer, take into account the profit earned on each processor
and the expected value of the amount refunded due to the processor
being defective.
|
Digitalis can expect to make
money from selling these processors. |
In the long run, they should expect to make dollars on each
processor sold.
|
Digitalis can expect to lose
money from selling these processors. |
In the long run, they should expect to lose dollars on each
processor sold.
|
Digitalis should expect to
neither make nor lose money from selling these processors. |
|
|