If a Vendor Has Correctly Used Marginal Analysis to Select

question 14

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

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Definitions:

Raw Materials

Basic materials and substances used in the initial stages of production and manufacturing processes.