Based on the above information, what is Willy's "expected loss" due to an accident?
Willy Wonka wants to avoid any accidents of the work floor of his chocolate factory.
If an accident does occur, it would cost Willy $500,000 in damages.
Also, the probability of an accident is 20%.
Pr(Accident)=0.2Pr(Accident)=0.2
A. $20,000
B. $50,000
C. $100,000
D. $125,000
Answer: $100,000
Economics
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