When you buy a set of speakers, Best Buy asks if you woul like to purchase insur

Question

When you buy a set of speakers, Best Buy asks if you woul like to purchase insurance for your speakers. Assume that pay ing for new speakers for customers who listen to music at a reasonable level (thus minimizing damage) costs, on average, $150 , and paying for new speakers for customers who listen to music very loudly (more likely to damage the speakers) costs, on average, $1000. Individuals know whether they like music at a reasonable level or at a loud level, but Best Buy can assume that 40% of listeners are reasonable listeners, and 60% are loud listeners. How much does Best Buy have to charge in order to break even?

Explanation / Answer

660 dollars as the best busy is the mean of the both levels

best buy = (40 x150 + 60 x1000)/100 = 660 dollars

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.