You have one item for sale in your store. The marginal cost of production is MC=$5, the probability of getting a low value customer who is willing to pay $25 is 10% and the probability of getting a high value customer willing to pay $30 is 90%.Compute the expected profit under the following different scenarios:

a.You choose a unique price to post and find your expected profit. Which price maximizes your expected profits?

b.You organize an auction (2ndprice, sealed) and two people show up. Find your expected auction profit.