The amount of loss (lower profit or higher cost) from not making the best decision for each state of nature is known as
A)best payoff.
B)opportunity loss.
C)risk profile.
D)utility.

Question

Quizplus · Accepted Answer

Opportunity loss, also known as opportunity cost, refers to the loss incurred by not choosing the best alternative for each state of nature. It represents the difference between the payoff of the best decision and the payoff of the decision actually made.

The Amount of Loss (Lower Profit or Higher Cost) from Not