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Two different chemotherapy regimens can be used to treat breast cancer. Treatment with doxorubicin is known to show a remission rate 40% of the time. This treatment costs $1,000. The other treatment, docetaxel, shows a remission rate 25% of the time and costs $850.
The two treatment plans are:
Plan A: Treat with doxorubicin. If not effective, treat with docetaxel.
Plan B: Treat with docetaxel. If not effective, treat with doxorubicin.
Based on the data provided, what is the expected cost per patient under plan B?
The answer choices are: $850, $1000, $1,510, or $1,600

Respuesta :

Plan a should work hope this helps

Answer:

Expected Cost under PLAN B = $1600

So, Option D. $1600 is correct

Step-by-step explanation:

Cost of first treatment (docetaxel) whether it is effective or not = $850

Cost of second treatment (doxorubicin) whether it is effective or not = $1000

But The Plan B says, if the first treatment is effective then second treatment is not needed

Now, chance that the first treatment is effective = 25%

So, chance that the first treatment is not effective and you need the second treatment = 75%  

P(first treatment is effective) = 0.25  

Cost(if first treatment is effective) = $850  

P(first treatment is not effective) = 0.75  

Cost(if first treatment is not effective) = 850 + 1,000 = $1850  

Expected cost = P(first treatment is effective) × Cost(if first treatment is effective) + P(first treatment is not effective) × Cost(if first treatment is not effective)  

Expected cost = (0.25 × 850) + (0.75 × 1,850)  

Expected cost = 212.50 + 1387.50  

Expected cost = $1,600

Hence, Expected Cost under PLAN B = $1600

So, Option D. $1600 is correct

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