Question: Question 2 (10 marks): A landlord is looking to increase the renting of his apartment units by 0%, 20%, or 40%. There is also another

Question 2 (10 marks): A landlord is looking to

Question 2 (10 marks): A landlord is looking to increase the renting of his apartment units by 0%, 20%, or 40%. There is also another apartment building nearby (competitor) with possibility of offering its units for rent, which could endanger the landlord's profit. The landlord has created the below payoff table for three decisions, D1, D2, and D3, in two cases of with the competitor and without the competitor. With competitor Without competitor D1: No increase $5000 $5000 D2: 20% increase $3000 $9000 D3: 40% increase $-1000 $12000 If P denotes the probability that the neighbor apartment offers its units for rent, for what range of P, a) D1 is the best choice? (4 marks) b) D2 is the best choice? (3 marks) c) D3 is the best choice

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