charge for each pizza sold. Pizza King believes that Noble Greek’s price is a random variable D
having the following mass function: P(D = $8) = .25, P(D = $11) = .35, P(D = $13) = .4. If
Pizza King charges a price p1 and Noble Greek charges a price p2, Pizza King will sell 110 +
15(p2-p1) pizzas. It costs Pizza King $3.5 to make a pizza. Pizza King is considering charging
$5, $6, $8, $9, or $11 for a pizza. Use each decision criterion (maximin, maximax, minimax
regret, expected value) to determine the price that Pizza King should charge."
This question was asked on Jan 21, 2013 and answered on Jan 22, 2013.
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