3.3) A small market orders copies of a certain magazine for itsmagazine rack each week. Let X = demand for the magazine,with the following pmf.
Suppose the store owner actually pays $2.00 for each copy of themagazine and the price to customers is $4.00. If magazines left atthe end of the week have no salvage value, is it better to orderthree or four copies of the magazine? [Hint: For boththree and four copies ordered, express net revenue as a function ofdemand X, and then compute the expected revenue.]
*What is the expected profit if three magazines are ordered?(Round your answer to two decimal places.)
*What is the expected profit if four magazines are ordered?(Round your answer to two decimal places.)
*How many magazines should the store owner order?
-3 magazines
-4 magazines
