Question

regional automobile dealership sent out fliers to prospective customers indicating that they had already won one of three different​ prizes: an automobile valued at

​$28,000​,a $125 gas​ card, or a $5 shopping card. To claim his or her​ prize, a prospective customer needed to present the flier at the​ dealership's showroom. The fine print on the back of the flier listed the probabilities of winning. The chance of winning the car was 1 out of 31,382,
the chance of winning the gas card was 1 out of 31,382, and the chance of winning the shopping card was 31,380out of 31,382

Complete parts​ (a) through​ (d).

a. How many fliers do you think the automobile dealership sent​ out?

_____fliers

b. Using your answer to​ (a) and the probabilities listed on the​ flier, what is the expected value of the prize won by a prospective customer receiving a​ flier?

μ=​____$nothing

​(Round to the nearest cent as​ needed.)

d. Do you think this is an effective​ promotion? Why or why​ not?

A.

No. The promotion will not turn a profit regardless of how many customers redeeming fliers make a purchase.

B.

Yes. The promotion will turn a profit if any of the customers redeeming fliers make a​ purchase, which is likely.

C.

No. The promotion will only turn a profit if the customers redeeming fliers make an average purchase less than the expected value of the prize​ won, which is unlikely.

D.

Yes. The promotion will turn a profit if the customers redeeming fliers make an average purchase greater than the expected value of the prize​ won, which is likely.

Answer 1