A Hot Dog Vendor Must Decide on Monday How Many

Multiple Choice

A hot dog vendor must decide on Monday how many hot dogs to have available for the coming Saturday's football game. Each hot dog costs the vendor $3.00 and is sold for $5.00. After the game any unsold hot dogs are discounted and sold to the university cafeteria for $1.75. The vendor believes that the demand for hot dogs follows the probability distribution shown below: The vendor's cost of overestimating demand, C_o, is

A) $5.00
B) $3.00
C) $1.75
D) $1.25