# Question: A rock concert promoter has scheduled an outdoor concert on

A rock concert promoter has scheduled an outdoor concert on July 4th. If it does not rain, the promoter will make $ 30,000. If it does rain, the promoter will lose $ 15,000 in guarantees made to the band and other expenses. The probability of rain on the 4th is .4.

a What is the promoter’s expected profit? Is the expected profit a reasonable decision criterion? Explain.

b In order to break even, how much should an insurance company charge to insure the promoter’s full losses? Explain your answer.

a What is the promoter’s expected profit? Is the expected profit a reasonable decision criterion? Explain.

b In order to break even, how much should an insurance company charge to insure the promoter’s full losses? Explain your answer.

**View Solution:**## Answer to relevant Questions

The demand (in number of copies per day) for a city newspaper, x, has historically been 50,000, 70,000, 90,000, 110,000, or 130,000 with the respective probabilities .1, .25, .4, .2, and .05. a. Graph the probability ...A high- security government installation has installed four security systems to detect attempted break-ins. The four security systems operate independently of each other, and each has a .85 probability of detecting an ...Use the estimated probability distribution in Exercise 5.8 to calculate μ σ2x , and. σx In each case, sketch the two specified normal curves on the same set of axes: a. A normal curve with μ = 20 and σ = 3, and a normal curve with μ = 20 and σ = 6. b. A normal curve with μ = 20 and σ = 3, and a normal ...United Motors claims that one of its cars, the Starbird 300, gets city driving mileages that are normally distributed with a mean of 30 mpg and a standard deviation of 1 mpg. Let x denote the city driving mileage of a ...Post your question