Probability Distributions Question

Question

A lottery corporation sells 100 000 tickets at \$3.00 per ticket. If the lottery has 2 first prizes worth \$20,000 each, 4 second prizes worth \$5000 each and 10 third prizes worth $500 each, determine the expected profit per ticket for the corporation.

I have no idea where to start, can someone help me please?

Answer 1

Assume all the tickets got sold. Then, the corporation got [ ] dollars from selling the 100,000 tickets and gave away a total of [ ] dollars in prize money. This is a net profit of [ ] dollars with 100,000 tickets sold. How much is that per ticket?

Now, fill in the blanks.

Answer 2

Assume all tickets are sold.

Now, cost of all tickets : 3*100,000=300,000

Prize amount = 2*20,000 + 4*5000 +10*500 = 65,000

Hence expected profit = 300,000-65,000 = 235,000

Profit per ticket = 235000/100000 = $ 2.35