A firm plans to enter two markets. In each market, the level of demand may be either high or low ...

A firm plans to enter two markets. In each market, the level of demand may be either high or low; also, the level of fixed costs may be either high or low. (High demand means sales are high; high fixed costs might be due to insurance rates or the energy costs of cooling the store—something that does not affect unit variable costs.) Entering these two markets may be viewed as an experiment. a. Give the sample space generated by this experiment. b. Let event A be “demand is high in both markets.” Which basic outcomes are in A? c. Let event B be “fixed costs are low in both markets.” Which basic outcomes are in B? d. What is A (upside down U) B ? What is A U B?