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Expected Value

Question 3 • CREDIT RE-SEAT MNPS Integrated Math III IC S2 26-27

A cafeteria purchases milk from one of three providers each week, depending on what other items need to be purchased. The probability of shopping at each store and the cost of one gallon of milk are shown in the table below. Probability and Milk Cost by StoreStoreProbability Milk Cost per GallonA30%$3.00B10%$3.50C60%$2.75The cafeteria should budget $

Answer
A
2.88
B
2.90
C
3.00
D
3.08

Explanation

Find the expected cost by multiplying each store’s milk cost by the probability of shopping there, then adding: 0.30 × $3.00 + 0.10 × $3.50 + 0.60 × $2.75 = $0.90 + $0.35 + $1.65 = $2.90. The cafeteria should budget $2.90 per gallon, which is choice B.

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