If a Vendor Has Correctly Used Marginal Analysis to Select

question 97

Multiple Choice

If a vendor has correctly used marginal analysis to select their stock levels for the day (as in the newsperson problem) ,and the profit resulting from the last unit being sold (C_u) is $0.90 and the loss resulting from that unit if it is not sold (C_o) is $0.50,which of the following is the probability of the last unit being sold?

• A) Greater than 0.357
• B) Greater than 0.400
• C) Greater than 0.556
• D) Greater than 0.678
• E) None of the above

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Definitions:

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