SCENARIO 20-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature.

-Referring to Scenario 20-1,the opportunity loss for A3 when S2 occurs is
A)0
B)4
C)5

Question

SCENARIO 20-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature.

-Referring to Scenario 20-1,the opportunity loss for A3 when S2 occurs is
A)0 
B)4 
C)5

Quizplus · Accepted Answer

The opportunity loss for A3 when S2 occurs is calculated by finding the difference between the payoff of the best action for S2 and the payoff of A3 for S2. If the best payoff for S2 is 10 and A3's payoff is 5, the opportunity loss is 10 - 5 = 5.

SCENARIO 20-1 The Following Payoff Table Shows Profits Associated with a Set