7 Suppose demand is a continuous random variable having a probability density function f (d), and c

(d, q) is given by Equation (2). Show that if q units are ordered, the expected cost E(q) may be written as

Now use Leibniz’s rule to derive Equation (5).

Transcribed Image Text:

E(q) =\cqf(t)dt + (-c)qf(t)dt + (terms not involving 9 in integrand)