When using the expected value criterion,the expected value for a given alternative is:
A)the amount the decision maker will receive if that alternative is chosen.
B)the amount the decision maker is most likely to receive if that alternative is chosen.
C)the average amount the decision maker would receive in the long run if the decision is repeated many times.
D)the amount by which the decision maker will regret choosing that alternative.

Question

Quizplus · Accepted Answer

The expected value criterion calculates the average amount that the decision maker is expected to receive in the long run if the decision is repeated many times. This involves multiplying each possible outcome by its probability, then adding up the results. Therefore, option C accurately describes the expected value for a given alternative when using this decision-making criterion.

When Using the Expected Value Criterion,the Expected Value for a Given