A CEO Is Looking to Determine How Much Profit the Company

Multiple Choice

A CEO is looking to determine how much profit the company can make if they purchase one of their competitors.Key to the decision is how much profit each competitor is likely to make given different levels of future demand in their market.Estimates of the profits for each competitor that could be purchased are estimated in the table below based on demand.If the CEO knows that demand will experience a small increase, which competitor should the company purchase? $$\begin{array} { | l | c | c | c | c | } \hline \text { PAYOFFS (\$mil) } & \text { Biprificarit decrease } & \text { Small decrease } & \text { Bmall increase } & \text { Siprificarit increase } \\\hline \text { Competitor A } & \$ 50 & \$ 100 & \$ 270 & \$ 1,450 \\\hline \text { Competitor B } & \$ 25 & \$ 75 & \$ 350 & \$ 1,330 \\\hline \text { Competitor C } & \$ 15 & \$ 80 & \$ 300 & \$ 1,700 \\\hline \text { Competitor D } & \$ 55 & \$ 90 & \$ 33 & \$ 1,500 \\\hline\end{array}$$

A) Competitor A
B) Competitor B
C) Cannot determine due to uncertainty
D) Competitor C
E) Competitor D