Dianna Ivy is evaluating a plan to expand the production facilities of International Compressors Company which manufactures natural gas compressors.Dianna feels that the price of coal is a significant factor in her decision, but she cannot control it.She is able to estimate how much the company would make under various prices of coal.Her estimates would represent the ___________.
A)payoffs
B)decision alternatives
C)states of nature
D)revised probabilities
E)prior probabilities

Question

Quizplus · Accepted Answer

Dianna's estimates represent the potential returns or payoffs that the company could receive under different prices of coal. Therefore, the correct answer is payoffs (option A). Decision alternatives (option B) refer to the different possible actions that Dianna can take, states of nature (option C) refer to the different possible outcomes or events that could occur, revised probabilities (option D) refer to adjusting the likelihood of different events occurring based on new information, and prior probabilities (option E) refer to the estimated likelihood of events occurring before any new information is considered.

Dianna Ivy Is Evaluating a Plan to Expand the Production