Rusto Farms sells produce to local markets. Management is trying to decide whether they should expand, keep the same size farm or reduce the size of the farm. They assessed the demand levels for their produce in the local market and probabilities associated with each demand level: high (probability 0.30), medium (probability 0.47), or low (probability 0.23). The payoffs they expect for each demand/acreage scenario are listed below. Acreage Demand Expand Same Size High Contract $118,000 $46,000 Medium $26,000 $47,000 $39,000 Low $26,000 $-15,700 $19,000 a. $26,000 What is perfect information about the demand worth under these circumstances? Please show your calculations. (4 marks) b. The farm has hired a consultant to forecast the demand. The consultant has predicted high demand. The accuracy of his predictions are as follows: P(PH \ H) = 0.71 P(PH\ M) = 0.20 P(PM \ H) = 0.17 P(PL \ H) = 0.12 Where: H = high demand P(PM \ M) = 0.70 P(PL \ M) = 0.10 P(PH \ L) = 0.09 P(PM \ L) = 0.19 P(PL \ L) = 0.72 PH = predict high demand M = medium demand L = low demand PM = predict medium demand PL = predict low