A company wants to add a new product to its existing line of products. There are two similar candidate products, A and B. The demand for the new product could be high, medium, or low, with probabilities of .25, .5, and .25, respectively. The demand and the corresponding profit for each product are shown below.
Which product should the company select based on the expected monetary value criterion?

Question

A company wants to add a new product to its existing line of products. There are two similar candidate products, A and B. The demand for the new product could be high, medium, or low, with probabilities of .25, .5, and .25, respectively. The demand and the corresponding profit for each product are shown below.
  Which product should the company select based on the expected monetary value criterion?

Quizplus · Accepted Answer

The Answer of A company wants to add a new product to its existing line of products. There are two similar candidate products, A and B. The demand for the new product could be high, medium, or low, with probabilities of .25, .5, and .25, respectively. The demand and the corresponding profit for each product are shown below.
  Which product should the company select based on the expected monetary value criterion?

A Company Wants to Add a New Product to Its