Question: A small drugstore orders copies of a news magazine for its magazine rack each week. Let x be the number of customers who come in to buy the magazine during a given week. The probability distribution of x is

The store pays $ .25 for each copy purchased, and the price of the magazine is $1.00. Any magazines unsold at the end of the week have no value.

a) If the store orders three copies of the magazine, what is the mean value of the profit? (Profit = Revenue – Cost)

b) If the store orders four copies of the magazine, is it better to order four than three copies of the magazine. Explain.