Question
. Ebrahim is planning to set up a booth at the weekend market. From past experience, he has learned that sales at the market fluctuate
. Ebrahim is planning to set up a booth at the weekend market. From past experience, he has learned that sales at the market fluctuate with both the weather and the advertising he purchases in the local newspaper. For the coming weekend, if he purchases advertising, he can expect to make a profit of $8,000 on goods sold [$9,000 (sales cost of goods sold) less $1,000 in advertising] if the weather is good; however, if the weather is bad he will only make a profit of $3,000. If he doesnt purchase advertising, he can expect to sell 40% less. For this coming weekend, there is a 75% chance of good weather. Calculate the expected profit for the coming weekend if Ebrahim does not advertise.
a) $4,050 b) $4,650 c) $6,000 d) $10,050
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