Question: This problem has a young Billy and an older and smarter Billy. ( a ) Every morning, rain or shine, young Billy Gates can be
This problem has a young Billy and an older and smarter Billy.
a Every morning, rain or shine, young Billy Gates can be found at the entrance to the metro, hawking
copies of The Morningstar. Demand for newspapers varies from day to day, but Billys regular
early morning haul yields him copies. He purchases these copies for $ per paper, and sells
them for $ apiece. Billy goes home at the end of the morning, or earlier if he sells out. He
can return unsold papers to the distributor for $ apiece. From experience, Billy knows that
demand for newspapers on any given morning is uniformly distributed between and where
each of the possible values is equally likely. What is the expected value of Billys
net earnings on any given day?
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