A Newsstand Is Trying to Determine How Many Bundles of Newspapers

question 33

Essay

A newsstand is trying to determine how many bundles of newspapers to stock.For each bundle,the newsstand makes $20.However,they lose $5 per bundle if they do not sell.The following discrete probability distribution has been estimated for their daily demand.How many bundles should they stock?
$$\begin{array} { | c | c | } \hline \begin{array} { c } \text { Demand } \\\text { (bundles) }\end{array} & \text { Probability } \\\hline 4 & .10 \\5 & .20 \\6 & .30 \\7 & .30 \\8 & .10 \\\hline\end{array}$$

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Definitions:

Restatement (Second)

A collection of model legal principles designed to clarify, modernize, and otherwise improve American common law, particularly in contracts and torts.

Intoxication

A state of being under the influence of drugs or alcohol, affecting cognitive and physical functions.

Legal Age

The age at which an individual is recognized by law as being capable of entering into a legally binding contract, among other adult responsibilities and rights.

Capacity to Enter

The legal ability of a person to enter into a binding contract, typically requiring them to be of a certain age and sound mind.