11. When you buy a set of speakers, Best Buy asks if you would like to purchase
ID: 1209316 • Letter: 1
Question
11. When you buy a set of speakers, Best Buy asks if you would like to purchase insurance for your speakers. Assume that paying 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. Individual 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
He will charge :
.40 (150) + .60 (1000) = 60 + 600 = 660.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.