pe interview question

You'd have to ask for the margin and the overhead to get an accurate answer. But throwing those out the window for now, I believe the answer should be: enough bread to satisfy 50 customers. This is the point at which anything in addition would provide a comparatively negative probability-adjusted profit (again, ignoring costs for simplicity since you'd need to ask for this).

My logic is 50 customers x $1 per customer = $50 of proceeds. 50 customers = 50% probability (continuing the trend of a 1% probability decline for each additional customer). Thus $50 x 50% probability = $25 profit. 

If I were to take any additional customers, then I'd theoretically be put in a position where the probability is I'll make less money. For example, 51 customers. 51 customers x $1 = $51 in proceeds. $51 proceeds x 49% probability = $24.99 profit. 

Therefore, since $25 profit > $24.99, I'm better off maximizing my probability-adjusted proceeds by stopping at 50 loafs of bread to satisfy 50 customers. 

Anyone disagree?