A marketing campaign will send brochures describing an expensive product to a set of customers. The cost for mailing and production per customer is $50. The company makes $500 revenue for each sale…

Question

Options

• A(Solicit=No, Purchase=No)=0, (Solicit=No, Purchase=Yes)=0, (Solicit=Yes, Purchase=No)=-50, (Solicit=Yes, Purchase=Yes)=0
• B(Solicit=No, Purchase=No)=0, (Solicit=No, Purchase=Yes)=0, (Solicit=Yes, Purchase=No)=-50, (Solicit=Yes, Purchase=Yes)=500
• C(Solicit=No, Purchase=No)=0, (Solicit=No, Purchase=Yes)=0, (Solicit=Yes, Purchase=No)=-50, (Solicit=Yes, Purchase=Yes)=450
• D(Solicit=No, Purchase=No)=0, (Solicit=No, Purchase=Yes)=500, (Solicit=Yes, Purchase=No)=-50, (Solicit=Yes, Purchase=Yes)=0

• A
  7% (4)
• B
  4% (2)
• C
  77% (43)
• D
  13% (7)

Explanation

Option C correctly accounts for profit = revenue − cost in each scenario. When a customer is solicited and purchases, the company earns $500 but spent $50 to reach them, yielding a net profit of $450, not $500 - making B wrong because it ignores the $50 mailing cost. Option A is wrong because it sets the (Solicit=Yes, Purchase=Yes) profit to $0, effectively counting the revenue as nothing. Option D is wrong on two counts: it assigns $500 profit to the (Solicit=No, Purchase=Yes) cell, which is impossible since no brochure was sent (no cost and no campaign-driven sale occurred), and it zeroes out the (Solicit=Yes, Purchase=Yes) cell.

Memory tip: Think of it as a simple ledger - you only spend money when you solicit ($−50), and you only earn money when they buy ($+500). The only cell where both happen is (Yes, Yes), so that's the only one requiring subtraction: $500 − $50 = $450.

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