A.

Extent Versus Discrete Problems

1. Decide whether to expand an existing product into a new region.

=Discrete
2. What discount should be given on products during the upcoming holiday sale?
=Extent
3. Should the advertising budget be changed for the upcoming year?
=Extent
4. Should you develop a new product for an existing product line?
=Discrete

B. Game Day Shuttle Service

Customer load Total cost Marginal Marginal cost Total revenue Profit
Revenue
1 $30 $10 0 10 -20
2 $32 $10 2 20 -12
3 $35 $10 3 30 -5
4 $38 $10 3 40 2
5 $42 $10 4 50 8
6 $48 $10 6 60 12
7 $57 $10 9 70 13
8 $68 $10 11 80 12

If I am compensated with $10 per ride, I must make sure that my profit is greater than my
compensated value. As a result, I must achieve the goal of a 7-customer load because it provides a
higher profit value than anything less than or greater than 7. 

C. Processing Insurance Claims