Please do subsection A-C Sal De Carlo is the manager for food sales for CoyoteStadium. For each home game, Sal must decide how manyhot dogs to have available for sale. The number of hot dogssold depends on the game's attendance. Sal pays $75 foreach hot dog and $15 for each hot dog bun. Hot dogs aresold to fans during the game for $175. Any leftover hotdogs are sold to the men's dorms for $25 apiece. Salestimates that demand for hot dogs for next week's gamewill be 10,000, 15,000, 20,000, or 25,000. Suppose that Salhas assigned the probabilities shown here for the differentdemand levels:Demand10,00015,00020,00025,000Probability0.200.250.300.25a. Set up the payoff table for Sal's decision concerning thenumber of hot dogs to order.b. What are the expected values for each decision that Salcan make?c. How much would Sal be willing to pay for perfectinformation about the number of hot dogs that will bedemanded during next week's game?

Cost of Hot dog = 75 Cost of bun = 15 Total Cost = 90 Demand schedule -

Sal De Carlo is the manager for food sales for Coyote Stadium. For each home game, Sal must decide how many hot dogs to have available for sale. The number of hot dogs sold depends on the game's attendance. Sal pays $75 for

Sal De Carlo is the manager for food sales for Coyote Stadium. For each home game, Sal must decide how many hot dogs to have available for sale. The number of hot dogs sold depends on the game's attendance. Sal pays $75 for

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter6: Simple Pricing

Section: Chapter Questions

Problem 6MC

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