MHB How Do You Calculate Average Revenue Per Group?

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To calculate average revenue per group, the probabilities and prices of each item ordered must be multiplied and summed. For Group A, the average revenue is calculated as (5*0.5) + (6*0.4) + (7*0.1), resulting in 5.6. For Group B, the calculation is (5*0.3) + (6*0.3) + (7*0.1), which needs to be completed for the final average revenue. The discussion highlights the importance of accurately applying probability to revenue calculations. Understanding these calculations is crucial for determining average revenue effectively.
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Hi, I'm currently stuck on a homework question and I was hoping if I could get some help.

Group A has 50% chance of ordering french fries (price: 5),40%chanceoforderingmilkshake(price:6), and 10% chance of ordering a burger (price: 7).GroupBhas30%chanceoforderingfrenchfries(price:5), 30% of chance of ordering a milkshake (price: 6),and10%chanceoforderingaburger(price:7) .

What is the average revenue per group?

Not sure if my work is correct: Avg revenue for Group A: (5∗50%)+(6 * 40%) + (7∗10%)=5.6.
Avg revenue for Group B: (5∗30%)+(6 * 30%) + ($7 *10%)
 
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Re: Avg Revenue Per Group

humm0s said:
Hi, I'm currently stuck on a homework question and I was hoping if I could get some help.

Group A has 50% chance of ordering french fries (price: 5),40%chanceoforderingmilkshake(price:6), and 10% chance of ordering a burger (price: 7).GroupBhas30%chanceoforderingfrenchfries(price:5), 30% of chance of ordering a milkshake (price: 6),and10%chanceoforderingaburger(price:7) .

What is the average revenue per group?

Not sure if my work is correct: Avg revenue for Group A: (5∗50%)+(6 * 40%) + (7∗10%)=5.6.
Avg revenue for Group B: (5∗30%)+(6 * 30%) + ($7 *10%)

Did you have a question about the response already supplied?

https://www.freemathhelp.com/forum/threads/110278-Average-Revenue-Per-Group
 

Thread 'Significant figures for inherently bound values'

I have been insisting to my statistics students that for probabilities, the rule is the number of significant figures is the number of digits past the leading zeros or leading nines. For example to give 4 significant figures for a probability: 0.000001234 and 0.99999991234 are the correct number of decimal places. That way the complementary probability can also be given to the same significant figures ( 0.999998766 and 0.00000008766 respectively). More generally if you have a value that...
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