Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Martin's service Station is considering entering the snowplowing business for the coming winter season. Martin can purchase either a snowplow blade attachment for the station's pick-up truck or a new heavy-duty snowplow truck. martin has analyzed the situation and believes that either alternative would be a profitable investment if the snowfall is heavy. smaller profits would result if the snowfall is moderate, and losses would result if the snowfall is light. the following profits ahve been determined.

Decision Alternatives Heavy, s1 Moderate, s2 Light, s3
Blade Attachment, d1 3500 1000 -1500
New Snowplow, d2 7000 2000 -9000

The probabilities for the states of nature are P(s1)=.4, P(s2)=.3, and P(s3)=.3. Suppose that martin decides to wait until september before making a final decision. Assessments of the probabilities associated with a normal (N) or unseasonably cold (U) september are as follows:

P(N)= .80 P(s1l N) =.35 P(s1 l U) = .62
P(U) = .20 P(s2 l N) = .30 P(s2 l U) = .31
P(s3 l N)= .35 P(s3 l U)= .07

A. Construct a decision tree for this problem
B. what is the recommended decision if Martin does not wait until September? What is the expected value?
C. What is the expected value of perfect information?
D. What is Martin's optimal decision strategy if the decision is not made until the September weather is determined? What is the expected value of this decision strategy?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M938438

Have any Question? 


Related Questions in Microeconomics

Milestone projectmilestone one propose organization for

Milestone Project Milestone One: Propose Organization for Analysis In Module Three, you will select the organization you would like to analyze in part two of the final project using the U.S. Securities and Exchange Commi ...

Essay questionyour manager knows that you have completed a

Essay Question Your manager knows that you have completed a course in Purchasing and Materials Management. Your manager would like you to write an essay for your fellow workers about the key purchasing/ supply management ...

Assignmentin this assignment you must break a norm this

Assignment In this assignment, you must break a norm. This breach must be done in a public forum. You will be writing an essay about your experiment, in which you must be sure to answer all of the questions listed in thi ...

Goal construct a case studyresearch paper that examines a

Goal: Construct a case study/research paper that examines a firm in the U.S. from a microeconomic standpoint and provide suggestions based on your findings. Step 1: Choose a firm for your focus. In addition to picking a ...

Assignmentin this assignment you will discuss the role of

Assignment In this assignment, you will discuss the role of entrepreneurship in improving the economic condition of countries and individuals and understand the manner in which this perception has spread around the world ...

Short-run economic fluctuationsplease have by 800 pm west

Short-Run Economic Fluctuations Please have by 8:00 pm west coast time cailfornia time 12/13/2016. Plagrism free, orignal work, and refs. APA format double space. please ask questions right away please dont wait to the l ...

Assignmentvirtually all general managers face

Assignment Virtually all general managers face capital-budgeting decisions in the course of their careers. The most common of these is the simple "yes" versus "no" choice about a capital investment. Regardless of the typ ...

Assignmentlinking questions 51 which one of the generic

Assignment Linking questions 5: 1. Which one of the generic competitive strategies best characterize your company's strategic approach to competing successfully? 2. Which athletic footwear companies in your industry appe ...

Description of assignmentreport paper basisstudents work

Description of Assignment: Report Paper basis. Students work together to research and profile a particular in Microeconomic policy: the property tax in the United States. Grading Criteria (What constitutes a good assignm ...

Assignmentbliss v attorney general of canada was a canadian

Assignment Bliss v. Attorney General of Canada was a Canadian Bill of Rights case. Stella Bliss' claim for maternity benefits (under the former Unemployment Insurance Act) as a form of "equality before the law" was rejec ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen