A company makes electronic gadgets. One out of every 50 gadgets is faulty, but the company doesn’t know which ones are faulty until a buyer complains. The company makes a RM3 profit on the sale of any working gadget, but suffers a loss of $80 for very fau

The probability distribution table can be created by using the following information: - Probability of a faulty gadget: 1/50 = 0.02 - Probability of a working gadget: 1 - 0.02 = 0.98 - Profit on sale of a working gadget: RM3 - Loss on repair of a faulty gadget: RM80 | Gadget | Probability | Profit/Loss | Expected Value | |--------|-------------|-------------|----------------| | Faulty | 0.02 | -RM80 | -RM1.60 | | Working| 0.98 | RM3 | RM2.94 | The expected value for each gadget is found by multiplying the probability of the gadget by the profit/loss of the gadget. The expected value for faulty gadgets is negative because the cost of repairing them outweighs the profit from selling them. To find the overall expected value, you add up the expected values of each gadget: (0.02 x -RM80) + (0.98 x RM3) = RM2.60 The overall expected value is positive, which means that the company can expect to make a profit in the long run. This makes sense, since the majority of gadgets are working and have a profit margin of RM3. The occasional faulty gadget may result in a loss, but it is not significant enough to outweigh the overall profit.