Assume that for a randomly selected day there is a 30 proba

Assume that for a randomly selected day, there is a 30 % probability of cold weather, 50 % probability of mild weather, and 20 % probability of warm weather. An optimistic decision maker would choose which alternative? An pessimistic decision maker would choose which alternative? An equally likely decision maker would choose which alternative? Using expected monetary value which alternative would be chosen? Mark M. Upp has just been fired as the university bookstore manager for setting prices too low (only 20 percent above suggested retail). He is considering opening a competing bookstore near the campus, and he has begun an analysis of the situation. There are two possible sites under consideration. One \\s relatively small, while the other is large. If he opens at Site 1 and demand is good, he will generate a profit of $50,000. If demand is low, he will lose $10,000. If he opens at Site 2 and demand is high, he will generate a profit of $80,000, but he will lose $30,000 if demand is low. He also has the option of not opening at either site. He believes that there is a 50 percent chance that demand will be high. A market research study will cost $5,000. The probability of a good demand given a favorable study is probability of a good demand given an unfavorable study is 0. 1 There is a 60 percent chance that the study will be favorable. Should Mark use the study? why? If the study is done and the results are favorable, what would Mark\'s expected profit be?

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