00 pe, onanother The Fresh 0 en Bakery knows that the number of pies can sen var

Question

00 pe, onanother The Fresh 0 en Bakery knows that the number of pies can sen vares rom day to day The owner belie es that on remaning25% of the days. To make sure she has enough product, the owner bakes ZO pes each day at a finvd the probabulity distribution for her daily proft % of the days sh %of he dass es Is ise es an she'sell sells pies each day at a cost of $150 each. Assume any pies that go unsold are thrown out at the end of the day If she sells the pies for 3 each A. Profit IP(profit) 3000.5 450 025 $E00 0.25 ofty $150 05 $225 02 $300 025 50 501 025 $3025 100 0.5 500 25 $400 025 x tp

Explanation / Answer

1. Profit when 100 pies sold => 100*3 - 200*1.5 = 0 with 50% probability

2. Profit when 150 pies sold => 150*3 - 200*1.5 = 150 with 25% probability

3. Profit when 200 pies sold => 200*3 - 200*1.5 = 300 with 25% probability

Therefore correct answer => C

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