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Sally's Silk Screning produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event itself, which lasts one day, Sally can sell T-shirts for $20 a piece. However, when the event ends, any unsold T-shirts are sold for $4 apiece. It costs Sally $8 to make a specialty T-shirt. Using Sally's estimate of demand that follows, how many T-shirts should she produce for the upcoming event. Please show calculations.
Demand Probability
300 .05
400 .10
500 .40
600 .30
700 .10
800 .05
Price/Feeder Quantity Demanded Quantity Supplied $300 500 1800 270 600 1700 240 700 1600 210 800 1500 180 1000 1400 150 1100 1300 120 1200 1200 90 1300 1100 60 1400 1000 30 1500 90
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