You just decided to add a new line to your manufacturing plant. Compute the expected loss/profit from the new line based on the following estimates: 70% chance profit will increase by $100,000; 20% chance profit will remain unchanged; 10% chance profit will decrease by $15,000. What is the expected profit of the new line?

You have two types of buyers for your product. The first type values your product at $10; the second at $6. Forty percent of buyers are the first type ($10 value); 60% are the second type ($6 value). What price maximizes your expected profit contribution?

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When you are working with probabilities you multiply the outcome by the percentage and add the results .