# A company is considering whether to market a new product. Assume, for simplicity, that if this product is marketed, there

## Question:

a. Let p = 0.4. For which values of C, if any, would this company choose to conduct the consumer survey?

b. Let p = 0.4. What is the largest amount that this company would be willing to pay for perfect information about the potential success or failure of the new product?

c. Let p = 0.5 and C = $15,000. Find the strategy that maximizes the company’s expected earnings in this situation. Does the optimal strategy involve conducting the consumer survey? Explain why or why not.

## This problem has been solved!

Do you need an answer to a question different from the above? Ask your question!

## Step by Step Answer:

**Related Book For**

## Data Analysis and Decision Making

**ISBN:** 978-0538476126

4th edition

**Authors:** Christian Albright, Wayne Winston, Christopher Zappe

**View Solution**

Create a free account to access the answer

**Cannot find your solution?**

Post a FREE question now and get an answer within minutes.
* Average response time.