The J&B Card Shop sells calendars featuring a different Colonial picture for each month. The once-a-year order for each year’s calendar arrives in September. From past experience the September-to-July demand for the calendars can be approximated by a normal distribution with µ = 300 and standard deviation = 20. The calendars cost $4.50 each, and J&B sells them for $10 each.
a. Suppose that J&B throws out all unsold calendars at the end of July. Using marginal economic analysis, how many calendars should be ordered?
b. If J&B sells any surplus calendars for $1 at the end of July and can sell all of them at this price, how many calendars should be ordered?

  • CreatedSeptember 17, 2015
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