1. The monthly profit made by a clothing manufacturer is proportional to the monthly demand, up to a maximum demand of 1000 units, which corresponds to the plant producing at full capacity. (Any excess demand over 1000 units will be satisfied by some other manufacturer, and hence yield no additional profit.) The monthly demand is uncertain, but the average demand is reliably estimated at 1000 units. At this level of demand the monthly profit is $3,000,000. Which of the following statements must be true of the expected monthly profit, P?

   P can have any positive value.

2. is possibly greater than $3,000,000.

3. P is equal to $3,000,000.

4. P is less than $3,000,000.

Answer rating: 100% (QA)

c P is equal to 3 000 000 Let s consider two scenarios Sc enario 1 The monthly demand is exactly 1... View the full answer