Half of all your potential customers would pay $10 for your product but the other half would only pay $8.You cannot tell them apart.Your marginal costs are $4.If you set the price at $10,the expected profit is:
A)$3
B)$4
C)$5
D)$6

Question

​Half of all your potential customers would pay $10 for your product but the other half would only pay $8.You cannot tell them apart.Your marginal costs are $4.If you set the price at $10,the expected profit is:
A)​$3
B)$4
C)$5
D)​$6

Quizplus · Accepted Answer

Half of the customers would pay $10, and the other half would pay $8. The expected profit is (10-4)*0.5 + (8-4)*0.5 = $3.

​Half of All Your Potential Customers Would Pay $10 for Your

Half of All Your Potential Customers Would Pay $10 for Your