Red Banjo Brewing is considering launching a sweet beer called Honey Ale. They are concerned that their customers may not accept the product, as it would be the first locally produced sweet beer. An initial decision analysis based on available data shows that the expected monetary value (EMV) of marketing Honey Ale is $20,000. The EMV of buying perfect information about the consumer response is $30,000. A market research company offers to do a study for Red Banjo for $10,000. Although its information is not perfect, the sample study should offer some information about the response to the new brew.

What should Red Banjos management do, based on EMV?

Neither buy the research firms sample information nor market Honey Ale.

Buy the research firms sample information.

Market Honey Ale instead of buying the research firms sample information.

There is not enough information available to answer the question.

Cost of imperfect information: $10,000 EMV Buy Perfect Information $30,000 Market Honey Ale ($20,000) Don't Buy Perfect Information Don't Market Honey Ale $0