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You are hired to evaluate the options a startup company has for selling a new imaging device and you are assessing the potential price of
You are hired to evaluate the options a startup company has for selling a new imaging device and you are assessing the potential price of the machine going into market. If the device is too expensive, medical centers could choose another option and you would lose profit. If the price of the device is low, the profits would not be enough to cover production and the initial investment. Once the price is set, it would be very difficult to significantly change it. Choosing a low price (a1) and if sales are adequate (s1), then the projected gain is $275000. However, if the sales are not adequate (s2), there could be a loss of $25000. Choosing a high price (a2) and if sales are adequate (s1), then the projected gain is $300000. However, if the sales are not adequate (s2), there could be a loss of $40000. Initial market surveys reveal that the probability of adequate sales is 0.4, is a2 the action that would give you the highest utility
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