00:01
So, assuming for this problem, he has 10 different people that will buy the paper, but he only has a one -third chance of buying the paper, of somebody buying the paper.
00:11
And so, he would expect the number of papers to be sold to be 3 .33.
00:20
So most of the time, if he gets 10 papers or the 10 different people that are available, most of the time, you're not going to have the person purchase the paper.
00:32
So if we look at if he buys no papers, we know that his expected profit is zero.
00:41
If he buys one paper and so on down, so if we find for this setting, if we want to find what the expected profit is, and we're not going to use it for the zero.
00:53
If he doesn't buy any papers, then we know that obviously he's not going to make any profit.
00:59
But if he buys one paper, let's find out how much profit he would expect to make.
01:05
So we want to find what the probability is for that binomial setting.
01:11
And that probability for the binomial setting, let me get rid of that column, the probability for that binomial setting, i'm going to utilize my binomial pdf and find that, which is going to be the combination of 10 choose x times that 1 third to the x power, and then i'll have the 2 thirds to the 10 minus x power.
01:38
So the likelihood that he sells all these, i'm going to put into my list two.
01:43
I have my data in list one.
01:46
And so the likelihood of selling one paper, if you buy 10 or if you have 10 people, the likelihood that someone purchased, we'd have, if you had 10 and you went to all your customers, then you'd have an 8 % chance, 9 % chance of only one person buying the paper.
02:08
If you buy 10 or you have 10 customers and you have two papers, you have a 1 .95 chance of having all the papers, two papers being sold.
02:20
For three, we have a 0 .260.
02:24
And for four, we have a 0 .228...