P-TV and QRS-TV are trying to decide whether to air a sitcom or a reality show in a given time slot. Viewers like both sitcoms and reality shows, but sitcoms are more expensive to produce than reality shows since real actors need to be hired. QRS-TV makes its decision first, and then P-TV observes that choice before making its decision. Both stations know all of the information in the decision tree below. Given the information in this decision tree, if QRS-TV announces that it will air a reality show, it can expect to:
A)lose $5 million.
B)earn $5 million.
C)earn $10 million.
D)earn $20 million.

Question

P-TV and QRS-TV are trying to decide whether to air a sitcom or a reality show in a given time slot. Viewers like both sitcoms and reality shows, but sitcoms are more expensive to produce than reality shows since real actors need to be hired. QRS-TV makes its decision first, and then P-TV observes that choice before making its decision. Both stations know all of the information in the decision tree below.  Given the information in this decision tree, if QRS-TV announces that it will air a reality show, it can expect to:
A)lose $5 million. 
B)earn $5 million. 
C)earn $10 million. 
D)earn $20 million.

Quizplus · Accepted Answer

If QRS airs a reality show, P-TV does better by also airing a reality show.

P-TV and QRS-TV Are Trying to Decide Whether to Air