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 nine watermelons when the demand is for nine watermelons?
A)6
B)13
C)20
D)27

Question

Quizplus · Accepted Answer

The payoff value for purchasing nine watermelons when the demand is also for nine watermelons is calculated by the profit made on each watermelon multiplied by the number sold. The profit per watermelon is $7 (selling price) - $4 (cost) = $3. Therefore, for nine watermelons, the total profit is 9 * $3 = $27.

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