Question

you have a product you are trying to sell and you are considering purchasing online ads. the cost of the ad will be \\$0.11 each time it is shown. the price of your product is \\$18.25. do the following for the given probability estimate.

a) find the expected value (to you) per ad that is viewed.
b) assume that you have an advertising budget large enough to place about 25,000 ads. are the ads likely to be a good purchase? explain.
c) would your answers to part (b) change if you could afford only 500 ads? explain.

based on your research, you believe that an average of 1 in 270 people who see your ad will buy your product.

a) the expected value (to you) per ad is dollars.
(round to the nearest cent as needed.)

Explanation:

Identify the given values and parameters

Using the Expected Value knowledge point

$$
LATEXBLOCK0
$$

Calculate the expected revenue per ad view

Using the Expected Value knowledge point

$$
LATEXBLOCK1
$$

Calculate the net expected value per ad view

Using the Expected Value knowledge point

$$
LATEXBLOCK2
$$

Round to the nearest cent

Using the Expected Value knowledge point

$$
LATEXBLOCK3
$$

Answer:

a) The expected value (to you) per ad is <blank>\(-0.04\)</blank> dollars.
(Round to the nearest cent as needed.)