If She Feels the Chances of Low, Medium, and High

question 106

Multiple Choice

If she feels the chances of low, medium, and high demand are 50%, 20%, and 30% respectively, what are the expected annual profits for the number of beauticians she will decide to hire?

• A)$54,000
• B)$55,000
• C)$70,000
• D)$80,000
• E)$135,000

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Definitions:

Price Skimming

A pricing strategy involving setting an initially high price before gradually lowering it over time as the product's novelty wears off.