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In a lottery, there are 250prizes of \(5,50prizes of \)25, and ten prizes of $100. Assuming that 10,000tickets are to be issued and sold, what is a fair price to charge to break even?

Short Answer

Expert verified

The reasonable price for a single ticket must be 0.35.

Step by step solution

01

Given information

There were10,000 tickets sold, with 250 rewards of$5.50, 25 prizes of $25,and ten prizes of $100.

02

Explanation

X
PX
X.Px
5
250/10000
0.125
25
50/10000
0.125
100
10/10000
0.1
0
9690/10000
0
Total1
0.35

Expectedvalue=X.pxExpectedvalue=0.35

The fair price to charge to break even is 0.35

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