TABLE 5-8 Two Different Designs on a New Line of Winter Jackets

question 71

Short Answer

TABLE 5-8
Two different designs on a new line of winter jackets for the coming winter are available for your manufacturing plants. Your profit (in thousands of dollars) will depend on the taste of the consumers when winter arrives. The probability of the three possible different tastes of the consumers and the corresponding profits are presented in the following table.

-Referring to Table 5-8, if you decide to choose Design A for half of the production lines and Design B for the other half, what is the risk of your investment?

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Definitions:

Price

The sum in money expected, obligated, or dispensed as compensation for something.

Demand Curve

A chart that illustrates the connection between a product's price and the amount of the product buyers are prepared to buy.

Change In Income

The difference in an individual's or household's income over a specific period, indicating an increase or decrease.

Demand

The desire for a particular product or service combined with the ability and willingness to pay for it.