TABLE 17-2
The following payoff matrix is given in dollars.
$\quad $ $\quad $ $\quad $ $\quad $ $\text {Action }$
$\begin{array} { c c c }
\text { Event }& A & B \
\hline1 & 400 & 700 \
2 & 200 & 500
\end{array}$
Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Table 17-2, what is the expected profit under certainty (EPUC )?
A) 0
B) 300
C) 600
D) 500

Question

TABLE 17-2 
 The following payoff matrix is given in dollars.
 $\quad $ $\quad $ $\quad $ $\quad $ $\text {Action }$
$\begin{array} { c c c } 
\text { Event }& A  & B \
\hline1 & 400 & 700 \
2 & 200 & 500
\end{array}$
Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Table 17-2, what is the expected profit under certainty (EPUC )?
A) 0
B) 300
C) 600
D) 500

Quizplus · Accepted Answer

The expected profit under certainty (EPUC) is calculated by taking the maximum payoff for each event and multiplying it by the probability of that event, then summing these values. For Event 1, the maximum payoff is 700, and for Event 2, it is 500. Thus, EPUC = (0.5 * 700) + (0.5 * 500) = 350 + 250 = 600.

TABLE 17-2 the Following Payoff Matrix Is Given \quad

TABLE 17-2
the Following Payoff Matrix Is Given $\quad$