Dr. Sarah Benson is an ophthalmologist who, in addition to prescribing glasses and contact lenses, performs optical laser surgery to correct nearsightedness. This surgery is fairly easy and inexpensive to perform. Thus, it represents a potential gold mine for her practice. To inform the public about this procedure, Dr. Benson advertises in the local paper and holds information sessions in her office one night a week at which she shows a videotape about the procedure and answers any questions that potential patients might have. The room where these meetings are held can seat ten people, and reservations are required. The number of people attending each session varies from week to week. Dr. Benson cancels the meeting if two or fewer people have made reservations. Using data from the previous year, Dr. Benson determined that the distribution of reservations is as follows:

Using data from the past year, Dr. Benson determined that each person who attends an information session has a 0.25 probability of electing to have the surgery. Of those who do not, most cite the cost of the procedure—$2,000—as their major concern.
a. On average, how much revenue does Dr. Benson’s practice in laser surgery generate each week? (Use 5000 replications.)
b. On average, how much revenue would the laser surgery generate each week if Dr. Benson did not cancel sessions with two or fewer reservations?
c. Dr. Benson believes that 40% of the people attending the information sessions would have the surgery if she reduced the price to $1,500. Under this scenario, how much revenue could Dr. Benson expect to realize per week from lasersurgery?

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Number of Reservations 12345 6 78910 Probability 0.02 0.05 0.08 0.16 0.26 0.18 0.11 0.07 0.05 0.01 0.01