A retailer is deciding how many units of a certain product to stock. The historical probability distribution of sales for this product is 0 units, 0.2; 1 unit, 0.3; 2 units, 0.4, and 3 units, 0.1. The product costs $8 per unit and sells for $25 per unit. What is the conditional value for the decision alternative "Stock 3" and state of nature "Sell 1"?
a. 1.4 units
b. $1 profit
c. $25 profit
d. $-8 profit
e. $23.80 profit
Answer is b. $1 profit
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