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Starbucks has entered into an agreement with a publisher to begin selling a food and beverage magazine on a trial basis. The magazine retails for $3.95 in other stores. Starbucks bought it for $1.95 and sold it for $3.49. During the trial period, Starbucks placed 10 copies of the magazine in each of 150 stores throughout the country. The file entitled Soldcontains the number of magazines sold in each of the stores.
a. Produce a frequency distribution for these data. Convert the frequency distribution into a probability distribution using the relative frequency assessment method.
b. Calculate the expected profit from the sale of these 10 magazines.
c. Starbucks is negotiating returning all unsold magazines for a salvage price. Determine the salvage price Starbucks will need to obtain to yield a positive expected profit from selling 10 magazines.
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