. [-/1 Points] DETAILS RAGSMDA9 14.E.010. MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER A real estate developer is planning to build a condominium development in a resort community. The company is trying to decide between building a small, medium, or large development. The payoffs (in $1,000s) received for each size of development will depend on the market demand for condominiums in the area, which could be low, medium, or high. The payoff matrix for this decision problem is: (Payoffs in $1,000s) Market Demand Size of Development Low Medium High Small 450 450 450 Medium 250 550 550 Large -350 350 850 The company estimates a 20% chance that market demand will be low, a 35% chance that it will be medium, and a 45% chance that it will be high. The developer can hire a consultant to predict the most likely level of demand for this project. This consultant has done many similar studies and has provided the developer with the following joint probability table summarizing the accuracy of the results. Actual Demand Forecasted Demand Low Medium High Low 0.1600 0.0100 0.0300 Medium 0.0280 0.2940 0.0280 High 0.0135 0.0360 0.4005 The sum of the entries on the main diagonal of this table indicates that the consultant's forecast is correct about 85.45% of the time, overall. (a) Construct the conditional probability table showing the probabilities of the various actual demands given each of the forecasted demands. Actual Demand Forecasted Demand Low Medium High Low Medium High (b) What is the EMV (in thousands of dollars) of the optimal decision without the consultant's assistance? thousand dollars (c) Construct a decision tree the developer would use to analyze the decision problem if the consultant is hired at a cost of $0. What is the EMV (in thousands of dollars) of the optimal decision with the consultant's free assistance? thousand dollars (d) What is the maximum price in thousands of dollars) the developer should be willing to pay the consultant? thousand dollars