A. It is impossible to sell more products that are supplied, so the conditional profit of having 4,000 pretzels and a demand of 5,000 is the same as having 4,000 pretzels available and a demand of 4,000.
B. This answer is incorrect. See the correct answer for a complete explanation.
C. It is impossible to sell more products that are supplied, so the conditional profit of having 4,000 pretzels and a demand of 5,000 is the same as having 4,000 pretzels available and a demand of 4,000.
D. It is impossible to sell more products than are supplied, so the conditional profit of having 4,000 pretzels and a demand of 5,000 is the same as having 4,000 pretzels available and having a demand of 4,000. If 4,000 are sold at a price of $1.00 each and the cost is $.30 each, the profit is ($1 - $.30) × 4,000 = $2,800.
