Determine expected value of each winnings

AI Thread Summary
The discussion focuses on calculating the expected value of winnings for two raffle scenarios to determine which is more profitable for a charitable organization. In Case A, with 3,000 tickets sold at $1 each, the total revenue is $3,000, while in Case B, with 2,000 tickets sold at $2 each, the total revenue is $4,000. The expected value for players is calculated by considering the payout of the $500 trip against the number of tickets sold. Participants emphasize the importance of understanding the payout structure and the odds of winning to determine the expected return for ticket holders. Ultimately, the analysis aims to identify which case yields a higher expected value for the organization and players.
Kristinanne
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1. Homework Statement [/b]

A charitable organization is raffling a trip worth $500 to raise money and needs to decide which of the following scenarios would be the most profitable based on expected value of the proposed game.

Case A: 3,000 tickets are sold at $1.00 each.

Case B, 2,000 tickets are sold at $2.00 each.

1. Determine the expected value for the winnings of the players in Case A.
2. Determine the expected value for the winnings of the players in Case B.



Homework Equations





The Attempt at a Solution



To do this, wouldn't I have to know what the payout is?
 
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You don't think the payout is the $500 trip?
 


I was thinking that. That would make a and b $500.00 then correct?
 


That would be the total payout for the raffle.

For each dollar though what is the expected return to each ticket holder taking into account their chance of winning?
 


For instance if I buy a ticket for $1 in a lottery with a 1:1,000,000 chance of winning - 1M tickets sold - then my expected winning is $1 return.

I only have one chance of winning ... but if I do I get $1,000,000 right?
 

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