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How much would the Bookstore manager pay to have perfect information? Use the information below Based on conversations with the chair of the economics department, suppose the bookstore manager believes that the following probabilities hold:

How much would the Bookstore manager pay to have perfect information? Use the information below Based on conversations with the chair of the economics department, suppose the bookstore manager believes that the following probabilities hold:

MATLAB: An Introduction with Applications
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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How much would the Bookstore manager pay to have perfect information? Use the information below Based on conversations with the chair of the economics department, suppose the bookstore manager believes that the following probabilities hold: P( 7 classes offered) = .10 P( 8 classes offered) = .30 P( 9 classes offered) = 40 P(10 classes offered) = 20 0312 248 112 212 The Campus Bookstore at East Tennessee State University must decide how many economics textbooks to order for the next semester's class. The bookstore believes that seven, eight, nine or ten sections of the course will be offered next semester; each section contains 40 students. The publisher is offering bookstores a discount if they place their onders early. If the bookstore orders too few texts and runs out the publisher will air express additional books at the bookstore's expense. If it orders too many texts, the store can return unsold sexts to the publisher for a partial creclit. The bookstore is considering ordering 280, 320, 360 or 400 texts in order to get the discount. Tiking to account the discounts, air express expenses, and credits for returned texts, the bookstore manager estimates the following resulting profits. Number of Textbooks to Onder 280 320 360 400 $2,900 $2,600 $2.400 $2,200 Number of Introductory Ronnie Classes Offered $3.730 $3.300 $30000 $2.800 9 52.640 53020 $3,00 $1,400 10 $2,400 $2,38 $340 $43MK
Transcribed Image Text:How much would the Bookstore manager pay to have perfect information? Use the information below Based on conversations with the chair of the economics department, suppose the bookstore manager believes that the following probabilities hold: P( 7 classes offered) = .10 P( 8 classes offered) = .30 P( 9 classes offered) = 40 P(10 classes offered) = 20 0312 248 112 212 The Campus Bookstore at East Tennessee State University must decide how many economics textbooks to order for the next semester's class. The bookstore believes that seven, eight, nine or ten sections of the course will be offered next semester; each section contains 40 students. The publisher is offering bookstores a discount if they place their onders early. If the bookstore orders too few texts and runs out the publisher will air express additional books at the bookstore's expense. If it orders too many texts, the store can return unsold sexts to the publisher for a partial creclit. The bookstore is considering ordering 280, 320, 360 or 400 texts in order to get the discount. Tiking to account the discounts, air express expenses, and credits for returned texts, the bookstore manager estimates the following resulting profits. Number of Textbooks to Onder 280 320 360 400 $2,900 $2,600 $2.400 $2,200 Number of Introductory Ronnie Classes Offered $3.730 $3.300 $30000 $2.800 9 52.640 53020 $3,00 $1,400 10 $2,400 $2,38 $340 $43MK
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