How much does best buy have to charge in order to break even

Reference no: EM13175584

When you buy a set of speakers, Best Buy asks if you would like to purchase insurance for your speakers. Assume that paying for new speakers for customers who listen to music at a reasonable level (thus minimizing damage) costs, on average, $150, and paying for new speakers for customers who listen to music very loudly (more likely to damage the speakers) costs, on average, $1000. Individuals know whether they like music at a reasonable level or at a loud level, but Best Buy can assume that 40% of listeners are reasonable listeners, and 60% are loud listeners. How much does Best Buy have to charge in order to break even?

A $660
B $1000
C $150
D $575

Reference no: EM13175584

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