The manager of Paul's fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Because this seedless watermelon costs $4,will sell for $7,and is highly perishable,he expects only to sell between six and nine of them. What is the payoff value for the purchase of six watermelons when the demand is for six watermelons?
A)18
B)21
C)24
D)42

Question

Quizplus · Accepted Answer

The payoff value is calculated by subtracting the total cost from the total revenue. For six watermelons, the total cost is 6 * $4 = $24, and the total revenue is 6 * $7 = $42. Therefore, the payoff value is $42 - $24 = $18.

The Manager of Paul's Fruit and Vegetable Store Is Considering