The new business venture, Best-In-World, has been manufacturing technology devices for over 2020 years and is considering adding a new technology device to its music line. They have an established reputation for building quality devices, but they are rather novice in the music industry. The Chief Innovation and Design Officer, Julie Naugle-Hall, is tasked with hiring a marketing firm to conduct a survey to determine the feasibility and demand for their new music device. The follow decision table illustrates the potential payoffs for a high demand, moderate demand and low demand for the new music device. The decision will be whether to start production on this new device in small scale, large scale or not at all.
 

	State of Nature
Alternatives	High Demand	Moderate Demand	Low Demand
Small-scale production	950,000	400,000	−200,000
Large-scale production	1,900,000	900,000	−1,000,000
No production	00	00	00
Probabilities	0.20	0.30	0.50

 

Step 3 of 3 :  

How much should Julie be willing to pay a marketing firm to conduct the survey for probability information regarding the feasibility and demand for their new music device?

Answer rating: 100% (QA)

Julie should be willing to pay the marketing firm an amount that is equal to the expected value of p... View the full answer