If a vendor has correctly used marginal analysis to select their stock Levels for the day (as in the newsperson problem)and the profit resulting from the last unit being sold (MP)is $0.90 and the loss resulting from that unit if it is not sold (ML)is $0.50,which of the following is the probability of the last unit being sold?
A)Greater than 0.357
B)Greater than 0.400
C)Greater than 0.556
D)Greater than 0.678
E)None of the above

Question

Quizplus · Accepted Answer

The probability of the last unit being sold is greater than 0.357 because the profit from selling the last unit is greater than the loss from not selling it.

If a Vendor Has Correctly Used Marginal Analysis to Select