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The Owner of Tastee Cookies Needs to Decide Whether to Lease

Question 78

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:  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

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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