The probability of heavy traffic on a provincial highway is 20%, while the probabilities of low and medium traffic are 50% and 30% respectively. It was estimated that annual maintenance costs of the highway are $20 000 in the case of low traffic, $30 000 in the case of medium traffic and $100 000 in the case of heavy traffic. Calculate the expected value of the annual maintenance costs.

Question

Quizplus · Accepted Answer

The Answer of The probability of heavy traffic on a provincial highway is 20%, while the probabilities of low and medium traffic are 50% and 30% respectively. It was estimated that annual maintenance costs of the highway are $20 000 in the case of low traffic, $30 000 in the case of medium traffic and $100 000 in the case of heavy traffic. Calculate the expected value of the annual maintenance costs.

The Probability of Heavy Traffic on a Provincial Highway Is