50% chanceLoss of 25 $50% chanceWin of X $ X should be at least $ to make the lottery acceptable.
Question
50% chanceLoss of 25 X should be at least $ to make the lottery acceptable.
Solution
To make the lottery acceptable, the win should at least cover the potential loss. In this case, the loss is $25.
Given that there's a 50% chance of either outcome, the win should be equal to the loss to break even. Therefore, X should be at least $25.
However, to make the lottery more than just acceptable (i.e., to make a profit), X should be more than $25.
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