Question: There is a garbage crisis in North Americatoo much garbage and no place to put it. As a consequence, the idea of recycling has become

There is a garbage crisis in North America—too much garbage and no place to put it. As a consequence, the idea of recycling has become quite popular. A waste-management company in a large city is willing to begin recycling newspapers, aluminum cans, and plastic containers. However, it is profitable to do so only if a sufficiently large proportion of households is willing to participate. In this city, 1 million households are potential recyclers. After some analysis, it was determined that, for every 1,000 households that participate in the program, the contribution to profit is $500. It was also discovered that fixed costs are $55,000 per year. It is believed that 50,000, 100,000, 200,000, or 300,000 households will participate, with probabilities .5, .3, .1, and .1, respectively. A preliminary survey was performed wherein 25 households were asked whether they would be willing to be part of this recycling program. Suppose only 3 of the 25 respond affirmatively, incorporate this information into the decision-making process to decide whether the waste-management company should proceed with the recycling venture.

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