At a gas station where people can pay in cash or by credit card, 20% of people pay by credit card and 80% of people pay cash. A gallon of gas costs $4.00 if paid by card and $3.50 if paid by cash. What is the expected revenue for a gallon of gas sold at this station?

Question

Mathematics

Yair Best

20 February, 04:19

At a gas station where people can pay in cash or by credit card, 20% of people pay by credit card and 80% of people pay cash. A gallon of gas costs $4.00 if paid by card and $3.50 if paid by cash. What is the expected revenue for a gallon of gas sold at this station?

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Answers (1)

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Evan Gilmore · Answer 1

A gallon of gas costs:

- $4.00 if paid by card,

- $3.50 if paid by cash.

0.2 * 4.00 + 0.8 * 3.50 = 0.8 + 2.8 = $3.60

Answer:

The expected revenue for a gallon of gas is $3.60.