A retailer is deciding how many units of a certain product to stock.The historical probability distribution of sales for this product is 0 units,0.2;1 unit,0.3;2 units,0.4,and 3 units,0.1.The product costs $8 per unit and sells for $25 per unit.What is the largest conditional value (profit)in the entire payoff table for this scenario?
A)$-24 profit
B)$-8 profit
C)$17 profit
D)$51 profit
E)$75 profit

Question

Quizplus · Accepted Answer

The largest conditional value in the payoff table is $51, which occurs when the retailer stocks 2 units and sells 3 units.

A Retailer Is Deciding How Many Units of a Certain