Interpret the Mean of a Discrete Random Variable as an Expected

question 117

Short Answer

Interpret the Mean of a Discrete Random Variable as an Expected Value
-On one busy holiday weekend, a national airline has many requests for standby flights at half of the usual one-way air fare. However, past experience has shown that these passengers have only about a 1 in 5 chance of getting on the standby flight. When they fail to get on a flight as a standby, their only other choice is to fly first class on the next flight out. Suppose that the usual one-way air fare to a certain city is $194 and the cost of flying first class is $520. Should a passenger who wishes to fly to this city opt to fly as a standby [Hint: Find the expected cost of the trip for a person flying standby.]

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