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What is a fair price for the competition?

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A community 5K run will award $50 to the winner. 55 people enter the race, and they each pay an entry fee of $20. Assuming they are all equally likely to win, what is a fair price for the competition? Round to the nearest cent. (Points : 6)

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Solution Summary

The expectation value of the runner's earnings is determined with step by step calculations and explanation and the answer.

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A fair price is the price a runner is expected to pay, so in the long run after running a very large number of races, the runner will break even - the balance of his earnings is ...

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