Question

the owner of tastee cookies needs to decide whether to lease a small, medium, or large new retail outlet. she estimates that monthly profits will vary with demand for her cookies as follows: size of outlet demand low high small $ 1,000 1,000 medium 500 2,500 large 0 3,000 if she feels there is a 30 percent chance that demand will be high, what is her expected payoff under certainty?

Answer 1

See the answer The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: table ------------------demand size of outlet ---- low-------------------high small ------------1000-----------------1000