The expenses for Jorge, a real estate agent, to list, advertise, and attempt to sell a house
Question:
The expenses for Jorge, a real estate agent, to list, advertise, and attempt to sell a house are $1400. If Jorge succeeds in selling the house, he will receive a commission of 6% of the sales price. If an agent with a different company sells the house, Jorge still receives 3% of the sales price. If the house is unsold after 3 months, Jorge loses the listing and receives nothing. Suppose that the probability that he sells a $150,000 house is 0.2, the probability that another agent sells the house is 0.5, and the probability that the house is unsold after 3 months is 0.3. Determine Jorge’s expectation if he accepts this house for listing. Should Jorge list the house?
Step by Step Answer:
A Survey of Mathematics with Applications
ISBN: 978-0134112107
10th edition
Authors: Allen R. Angel, Christine D. Abbott, Dennis Runde