The Operations Manager for a Local Bus Company Wants to Decide

question 8

Multiple Choice

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows:
If he feels the chances of low, medium, and high demand are 30 percent, 30 percent, and 40 percent respectively, what is the expected annual profit for the bus that he will decide to purchase?

• A) $15,000
• B) $61,000
• C) $69,000
• D) $72,000
• E) $87,000

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Definitions:

Clayton Act

A U.S. antitrust law enacted in 1914, aimed at preventing anticompetitive practices in their incipiency.

Tire-Repair Kits

A collection of tools and materials used for fixing punctures in vehicle tires.

Sale Conditions

Terms specified in a sales agreement that dictate the circumstances under which a sale takes place.

Clayton Act

A U.S. antitrust law aimed at preventing monopolies and promoting competition.