If a Vendor Has Correctly Used Marginal Analysis to Select

question 55

Multiple Choice

If a vendor has correctly used marginal analysis to select its stock levels for the day (as in the newsperson problem in the text) , and if the profit resulting from the last unit being sold (C_u) is $120 and the loss resulting from that unit if it is not sold (C_o.) is $360, which of the following is the probability of the last unit being sold?

• A) Greater than 0.90
• B) Greater than 0.85
• C) Greater than 0.75
• D) Greater than 0.25
• E) None of these choices are correct

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Definitions:

Random Errors

Errors in measurement that lead to inconsistent results, often caused by unpredictable and uncontrollable factors.

Randomized Controlled Trials

A study design that randomly assigns participants into an experimental group or a control group to measure the effect of an intervention.

Face Validity

The degree to which an assessment or test appears to measure what it is intended to measure, based on subjective judgment.

Criterion-related Validity

The extent to which a measure is related to an outcome or criterion, testing how well one measure predicts an outcome for another measure.