Soft selling occurs when a buyer is skeptical of the usefulness of a product and

Question

Soft selling occurs when a buyer is skeptical of the usefulness of a product and the seller orders to set a price that depends on realized value. For example a sales representative is trying to sell a company a new accounting system that will certainly reduce costs by 20%, however the customer has heard this claim before and believes there is only a 50% chance of realizing the cost reduction and 50% chance of realizing no cost reduction
Assume the customer has an initial cost of $700.00 According to the customers belief, the expected value of the accounting system or the expected reduction in cost is $_____________. Soft selling occurs when a buyer is skeptical of the usefulness of a product and the seller orders to set a price that depends on realized value. For example a sales representative is trying to sell a company a new accounting system that will certainly reduce costs by 20%, however the customer has heard this claim before and believes there is only a 50% chance of realizing the cost reduction and 50% chance of realizing no cost reduction
Assume the customer has an initial cost of $700.00 According to the customers belief, the expected value of the accounting system or the expected reduction in cost is $_____________.
Assume the customer has an initial cost of $700.00 According to the customers belief, the expected value of the accounting system or the expected reduction in cost is $_____________.

Explanation / Answer

The expected value of the accounting system = 0.50 * $ 700 - 0.50 * $ 700

The expected value of the accounting system = $ 0

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