Consider a store owner who buys items one day for $1.00 and sells them the same day for $1.50. Assume the item has no value the next day and that items cannot be returned for credit. If the demand for the items is binomially distributed, how many items shoudl the store owner purchase to maximize the expected profit?
Alright I am not quite sure how to start this problem. Any help would be greatly appreciated.
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