Question
Omar's Fruit Shop sells only apples and bananas. Each week, Omar puts either apples or bananas on sale. He is trying to figure out which
Omar's Fruit Shop sells only apples and bananas. Each week, Omar puts either apples or bananas on sale. He is trying to figure out which fruit he should put on sale this week.
Omar gets all of his business from people who walk by his fruit shop and stop in. He performs some market research and asks 800 different people if they would purchase apples, bananas, or no fruit if they walked by and apples were on sale. He does the same for bananas being on sale.
This week a total of 400 people will walk by Omar's Fruit Shop.
The following table shows the profit for each type of fruit depending on which fruit Omar puts on sale:
Apples on saleBananas on sale
Profit from apples$0.25$0.40
Profit from bananas$0.45$0.30
The following table shows the results from his market research.
Customer choiceApples on saleBananas on sale
Apples60492
Bananas90620
No fruit10688
Total800800
What is Omar's expected profit if he puts apples on sale?
What is Omar's expected profit if he puts bananas on sale?
To maximize his expected profit, Omar should put apples or bananas on sale.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started