Using the distribution in Exercise 2, suppose that the lens can be sold as is if there are no defects for $20. If there is one defect, it can be reworked at a cost of $5 and then sold. If there are...

Using the distribution in Exercise 2, suppose that the lens can be sold as is if there are no defects for $20. If there is one defect, it can be reworked at a cost of $5 and then sold. If there are two defects, it can be reworked at a cost of $10 and then sold. If there are more than two defects, it must be scrapped. What is the expected net revenue generated during the shift if 100 contact lenses are produced?

Exercise 2

The following is a probability distribution of the number of defects on a given contact lens produced in one shift on a production line:

Let A be the event that one defect occurred, and B be the event that 2, 3, or 4 defects occurred. Find:

(a) P(A) and P(B)

(b) P(A and B)

(c) P(A or B)