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NISSE vetWork must a ecide on whileh one of two new webs.0 games to create: MANAR or ELECTRON. The costs of producing and operating the
NISSE vetWork must a ecide on whileh one of two new webs.0 games to create: MANAR or ELECTRON. The costs of producing and operating the two games are similar and the average monthly subscription for either game could be low (21,000 subscribers), medium (65,000 subscribers), or high (164,000 subscribers). If the company chooses to create MANAR, they will charge $16 per account for monthly subscription, and the probabilities of high and low subscriptions are 0.62 and 0.18 respectively. For ELECTRON, there is a 46%% chance that a competitive game will appear on the market. The probability of low subscription is 0.17 if no competitive game appears and 0.41 if a competitive game appears. The probability of medium subscription is 0.27 whether or not competition appears. The company will charge $21/month per account for subscription to ELECTRON if no competitive game appears but will only charge $12/month if competition appears. Construct a decision tree for the problem, where payoffs are total monthly subscription in dollars. For example, if MANAR is created and subscription is high, then subscription dollars will be $16*164080 = $2, 624,090. Report answers accurate to the nearest dollar. 3. What is the expected monetary value for MANAR? b. What is the expected monetary value for ELECTRON if there is no competition? c. What is the expected monetary value for ELECTRON if competition appears? d. What is the expected monetary value for ELECTRON? e. What is the expected monetary value of the optimal decision? f. What is the optimal decision? Select an answer y
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