The manager of Pauls fruit and vegetable store is considerin

The manager of Paul\'s fruit and vegetable store is considering the purchase of a new seedless watermelon from a wholesale distributor. Since this seedless watermelon costs $4, will sell for $7, and is highly perishable, he only expects to sell between six and nine of them. What is the opportunity loss for purchasing nine watermelons when the demand is for seven watermelons? 8, 0, 4, 0r 12?

Solution

seedless watermelon costs $4

purchasing nine watermelons cost is 9*4=36

but the demand is seven watermelons. the seven watermelons cost is 7*4=28

Thus, the opportunity loss is 36-28=8