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Sagot :
Answer: Hello attached below is the missing part of your question
answer : discount will be the preferred service, if the probability of strong demand is less than 0.5786
Explanation:
The full price ( EV ) = (960)*p + ( -490 )*(1-p)
= 960p + 490p - 490
= 1450p - 490 ------------- ( 1 )
Discount price ( EV ) = (370)*p + (320)*(1-p)
= 370p - 320p + 320
= 50 p + 320 ---------------- ( 2 )
equate equation 1 and 2
1450p - 490 = 50p + 320
1450p - 50p = 320 + 490
∴ p = 810/1400 = 0.5786
Hence discount will be the preferred service, if the probability of strong demand is less than 0.5786

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