Find the Expected Value of the Optimal Strategy $75 \%$ Chance of a Weak Economy, and A

Multiple Choice

Find the expected value of the optimal strategy.
-A clothing manufacturer must decide which of two clothing lines to emphasize for the spring season, her usual line or a budget line. Her success with each line depends on the state of the economy next year. She estimates the payoff matrix to be as follows:

Economists believe that there is a 5\% chance of a strong economy next year, a $75 \%$ chance of a weak economy, and a $20 \%$ chance of an in-between economy. What is the manufacturer's maximum expected profit?

A) $\$ 20,667$
B) $\$ 14,400$
C) $\$ 25,000$
D) $\$ 25,700$