The Management of MultiVision, a Cable TV Company, Intends to Submit

question 19

Multiple Choice

The management of MultiVision, a cable TV company, intends to submit a bid for the cable television rights in one of two cities, A or B. If the company obtains the rights to city A, the probability of which is 0.3, the estimated profit over the next 10 yr is $10 million; if the company obtains the rights to city B, the probability of which is 0.4, the estimated profit over the next 10 yr is $7 million. The cost of submitting a bid for rights in city A is $300,000 and that of city B is $300,000. ​
By comparing the expected profits for each venture, determine whether the company should bid for the rights in city A or city B.

• A) City A
• B) City B

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Definitions:

Price Discrimination

The practice of selling the same product to different customers at different prices, often based on factors like quantity purchased, customer type, or market location.

Core Principles

Core principles or standards that act as the underlying basis for a system, organization, or person's behavior and choices.

Professional Selling

The act of selling products or services in a business-to-business environment, focusing on meeting the customer's needs.