Question: A beverage stand can sell either soft drinks or coffee on any given day.If the stand sells soft drinks and the weather is hot, it

A beverage stand can sell either soft drinks or coffee on any given day.If the stand sells soft drinks and the weather is hot, it will make P2,500; if the weather is cold, the profit will be P1,000.If the stand sells coffee and the weather is hot, it will make P1,900; if the weather is cold, the profit will be P2,000.The probability of cold weather on a given day at this time is 60%.

The expected payoff for either selling coffee or soft drinks and the expected payoff if the vendor has perfect information are

Coffee

Soft drinks

Perfect information

P1,360

P1,600

P3,000

P1,960

P1,600

P2,200

P1,900

P1,360

P3,900

P1,900

P1,960

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