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Given the following demand schedule for newspapers, find the optimal order size if papers cost the newsboy $.50 and he can sell them for $1.50 each.
a. Assume any unsold papers cannot be resold.
k P(X=k)
55 0.05
56 0.05
57 0.15
58 0.3
59 0.3
60 0.1
61 0.05
b. How does your answer change if the newsboy can sell unsold papers back to the newspaper for $.40 each?
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