Hamburgers are on the menu tomorrow at a school cafeteria and the manager needs to decide how many to have ready for the lunch hour. Each hamburger costs the school $1.85 and is sold for $3.50. Leftover hamburgers have no monetary value. The manager expects demand tomorrow to be 100, 150, 200, or 250 hamburgers and would like to prepare one of these four quantities for lunchtime. If the manager uses the equally likely criterion, how many hamburgers will be prepared?
A)250
B)100
C)150
D)200

Question

Quizplus · Accepted Answer

The expected profit for each quantity is:100 hamburgers: (100 x $3.50) - (100 x $1.85) = $165150 hamburgers: (150 x $3.50) - (150 x $1.85) = $255200 hamburgers: (200 x $3.50) - (200 x $1.85) = $340250 hamburgers: (250 x $3.50) - (250 x $1.85) = $425The manager should prepare 200 hamburgers because it has the highest expected profit.

Hamburgers Are on the Menu Tomorrow at a School Cafeteria