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The following table shows the estimated quarterly profits of a company (in thousands of dollars): Demand for Service Service Strong Weak Full price $960 $490
The following table shows the estimated quarterly profits of a company (in thousands of dollars):
Demand for Service
Service Strong Weak
Full price $960 $490
Discount $670 $320
Suppose that management of the company believes that the probability of strong demand is 0.7 and the probability of weak demand is 0.3. Use the expected value approach to determine an optimal decision.
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