Upp has just been fired as the university book store

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Introduction to Statistics and Data Analysis
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Chapter 5 / Exercise 5.32
Introduction to Statistics and Data Analysis
Olsen/Peck
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Mark M. Upp has just been fired as the university book store manager for setting prices too low (only 20 peabove suggested retail). He is considering opening a competing bookstore near the campus, and he has bean analysis of the situation. There are two possible sites under consideration. One is relatively small, whileother is large. If he opens at Site 1 and demand is good, he will generate a profit of $50,000. If demand is lwill lose $10,000. If he opens at Site 2 and demand is high he will generate a profit of $80,000, but he will $30,000 if demand is low. He also has decided that he will open at one of these sites. He believes that there50 percent chance that demand will be high. He assigns the following utilities to the different profits:U(50000)=?U(-10000)=0.22U(80000)=1U(-30000)=0For what value of utility for $50,000, U(50000), will Mark be indifferent between the two alternatives?97)Suppose that the payoff from an investment depends upon market conditions. A great market has payoff of$200,000, a normal market has a payoff of $100,000, and a poor market has a payoff of $20,000. What is thLaplace criterion value?16
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Introduction to Statistics and Data Analysis
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Chapter 5 / Exercise 5.32
Introduction to Statistics and Data Analysis
Olsen/Peck
Expert Verified
SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question98)Briefly describe decision making under certainty.98)99)Briefly describe Decision Making Under Risk.99)100)Briefly describe decision making under uncertainty.100)101)List the six steps in decision making.101)102)Describe the structure of a payoff table.102)103)Briefly describe decision tree analysis.103)104)Briefly describe EVSI.104)105)Describe the utility curve of a risk seeker.105)106)Describe the utility curve of a risk avoider.106)107)List the five major decision criteria used when making decisions under uncertainty.107)17

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