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The Owner of Tastee Cookies Needs to Decide Whether to Lease

Question 154

Multiple Choice

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:
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: If she feels there is a 30 percent chance that demand will be high, what is her expected payoff under certainty? A) $1,600 B) $1,100 C) $1,000 D) $900 E) $500
If she feels there is a 30 percent chance that demand will be high, what is her expected payoff under certainty?


A) $1,600
B) $1,100
C) $1,000
D) $900
E) $500

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