28
g
Table 3. Probabilities of Yield-Price Combinations
Price
Level
Yield Level
High
Normal
Low
High
P11
P12
P13
Normal
P21
P22
p23
Low
P31
P32
P33
aWhere, P¡j
- P(Y.) P(Py.)
1 yJ
i = 1,2,3
j = 1,2,3
and 1 = high
2 = normal
3 = low
The expected value of gross (and net) income can be determined
using the calculated probabilities of low, normal, and high yields
and prices, and the expected value of each yield and price. Using
the notation from Table 3, the following equations express the expected
income (ECnD) for a crop,
EM pn