The Above Table Shows the Probability Distribution of Cake Sales

question 145

Multiple Choice

The above table shows the probability distribution of cake sales at Busy Betty's Bakery.
-Refer to the table above. Busy Betty sells her cakes for $20 each and her constant marginal cost to produce each cake is $12, which is equal to her (constant) average total cost. What is her expected marginal benefit from holding the 20th cake in inventory?

• A)$8.00
• B)$7.80
• C)$7.20
• D)$12.80

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