A production manager is deciding which of four potential selling prices to charge for a unique product. The market for the product is uncertain and reaction from competitors may be strong, medium or weak. The manager has prepared a payoff table showing the forecast profit for each of the possible outcomes.

Competitor Reaction	Selling Prices
	$ 80	$ 90	$100	$ 110
Strong	$ 70,000	$ 80,000	$ 70,000	$ 75,000
Medium	$50,000	$60,000	$70,000	$ 80,000
Weak	$ 90,000	$100,000	$ 90,000	$ 80,000

Required:

1. (a) Identify the selling price that would be chosen if the manager applies the maximin criterion to make the decision.

2. (b) Identify, using a regret matrix, the selling price that would be chosen if the manager applies the minimax regret criterion to make the decision.

3. (c) Explain the meaning of expected value with a relevant example.