Charley Citrus has to leave town quickly and cannot take his car with him. Since he does
Question:
(a) Write an expression for Harriet’s expected profit as a function of x. _____________ What price should she offer Charley in order to maximize her expected profit? _________
(b) Write an expression for Harriet’s expected profit as a function of x. _________ What price should she offer in order to maximize her expected profit? __________
(c) Suppose that Harriet thinks that Charley is sure to sell the car if she offers more than $200 and that the probability that Charley will sell her the car is x/200 for x ≤ 200. What price should she offer in order to maximize her expected profit? _________
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