Question

involving a carnival fishpond. Assume that the pond contains 100 fish: 78 purple, 21 blue, and 1 silver. A contestant pays $0.65 to randomly catch one fish and receives $0.40 if the fish is purple, $0.80 if the fish is blue, and $13.00 if the fish is silver. How much (on average) does the carnival gain on each play?

Answer 1

On average the carnival gain on each play

= 0.04 dollars

Explanation:

Given that a pond contains 100 fish: 78 purple, 21 blue, and 1 silver.

Fish Purple Blue Silver total

Frequency 78 21 1 100

Prob 0.78 0.21 0.01 1

Revenue 0.4 0.8 13

game fee 0.65 0.65 0.65

Net revenue -0.25 0.15 12.35

Net Rev*Prob -0.195 0.0315 0.1235 -0.04

Thus we get per player expected net revenue is -0.04

This would be gain for Carnival

Hence On average the carnival gain on each play

= 0.04 dollars