Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100,200,or 400 dozen roses.If the probability of selling 100 dozen roses is 0.2 and 200 dozen roses is 0.5,then the probability of selling 400 dozen roses is
A)0.7
B)0.5
C)0.3
D)0.2

Question

Quizplus · Accepted Answer

The sum of the probabilities of selling 100, 200, and 400 dozen roses must equal 1. Therefore, the probability of selling 400 dozen roses is 1 - 0.2 - 0.5 = 0.3. 
Since the owner can purchase 1 of 3 amounts of roses, the best choice depends on the expected profit. 
For 100 dozen roses: 
- Cost: $100 
- Revenue from sales: $200 
- Revenue from unsold roses: $50 
- Total profit: $150

For 200 dozen roses: 
- Cost: $200 
- Revenue from sales: $400 
- Revenue from unsold roses: $50 
- Total profit: $250

For 400 dozen roses: 
- Cost: $400 
- Revenue from sales: $800 
- Revenue from unsold roses: $200 
- Total profit: $600

Therefore, the best choices are either to purchase 200 dozen roses or 400 dozen roses, depending on how much inventory the owner wants to hold onto and how much profit they want to make.

Blossom's Flowers Purchases Roses for Sale for Valentine's Day