Statistics Solutions

(Solution Library) Suppose the following probability distribution describes the possible number of barrels of oil (in millions) that might be found when drillin

Question: Suppose the following probability distribution describes the possible number of barrels of oil (in millions) that might be found when drillin g for oil.

Barrels P(Gallons)
0 .1
15 .5
30 .2
50 .2
  1. What is the probability that at least 30 million barrels of oil will be found?

b) If oil is selling for $30 per barrel, what is the expected revenue from drilling an oil well?

c) Suppose it costs $5 million to drill the well and then (if oil is actually pumped to the surface) it costs the company $8 per barrel to extract the oil from the ground, what is the companies expected profit from drilling an oil well?

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