at random. Let's say you choose curtain 3. Before revealing what's behind the curtain, the game show host always offers to show you what one of the other curtains contains. She shows you that curtain 2 is empty; in fact, she always shows you an empty curtain. (You know that's how the game works; so does the audience and everybody else.) Now you must decide: Do you stick with your original choice, curtain 3, or switch to curtain 1? Which action gives you the better chance of finding the grand prize? Exercise 4.5 Filene's Basement, a Boston-based department store, has a policy of marking down the price of sale items each week that they go unsold. You covet an expensive brand of winter coat that is on sale for $100. In fact, you would be willing to pay as much as $120 for it. Thus, you can buy it now (for a profit of $120 - $100 = $20) or wait until next week, when the price will be reduced to $75 if the coat is still available. The chances of its being available next week are 2/3. If it is available in week 2, you can buy or wait until week 3. There is a 1/2 chance it will be sold between weeks 2 and 3 and a a 1/2 chance it will be available at a reduced price of $60. Finally, if it is available in week 3, you can buy or wait until week 4. There is a 1/4 chance it still will be available, at a price of $50 (and a 3/4 chance it will be sold in the meantime). Week 4 is your last chance to buy before the coat is withdrawn. . How long should you wait before buying? Illustrate via a decision tree. . Filene's has 120 of these winter coats for sale. What is expected total revenue from the pricing scheme in part a? Crop the questions you need help with. You have 11 questions remaining