A bakery would like you to recommend how many loaves of its famous marble rye bread to bake at the beginning of the day. Each loaf costs the bakery $2.00 and can be sold for $7.00. Leftover loaves at the end of each day are donated to charity. Research has shown that the probabilities for demands of 25, 50, and 75 loaves are 30%, 20%, and 50%, respectively. Make a recommendation for the bakery to bake 25, 50, or 75 loaves each morning. Find the expected monetary value when baking 25 loaves. EMV=S (Type an integer or a decimal.) D Find the expected monetary value when baking 50 loaves. EMV=$(Type an integer or a decimal.) Find the expected monetary value when baking 75 loaves. EMV=$(Type an integer or a decimal.) Make a recommendation for the bakery to bake 25, 50, or 75 loaves each morning. The bakery should bake loaves of bread every morning. 25 50 75

A bakery would like you to recommend how many loaves of its famous marble rye bread to bake at the beginning of the day. Each loaf costs the bakery $2.00 and can be sold for $7.00. Leftover loaves at the end of each day are donated to charity. Research has shown that the probabilities for demands of 25, 50, and 75 loaves are 30%, 20%, and 50%, respectively. Make a recommendation for the bakery to bake 25, 50, or 75 loaves each morning. Find the expected monetary value when baking 25 loaves. EMV=S (Type an integer or a decimal.) D Find the expected monetary value when baking 50 loaves. EMV=$(Type an integer or a decimal.) Find the expected monetary value when baking 75 loaves. EMV=$(Type an integer or a decimal.) Make a recommendation for the bakery to bake 25, 50, or 75 loaves each morning. The bakery should bake loaves of bread every morning. 25 50 75

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.3P

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How would you find the probabilities for this question? (see attachment)
Show that a decision maker who has a linear utilityfunction will rank two lotteries according to their expectedvalue.
Answer correctly with in 50minutes
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