=+37. Automobile Production. An automobile company is deciding which cars to produce. The company has a choice between two models: a high-end model selling at $45,000, and a moderately priced model selling at $25,000. The payoff table shows monthly sales for each model. Based on past experience, the automobile company makes the following assumption about the demand for the high-end car. Demand will be low, moderate, or high with probabilities 0.4, 0.4, and 0.2, respectively. The company also assumes that if demand is low for the high-end car, it will be higher for the moderately priced car.

Demand for High-End Car Low

(0.4)

Moderate

(0.4)

High

(0.2)

High-End Car 4,500,000 6,750,000 9,000,000 Moderately Priced Car 5,000,000 3,750,000 2,500,000