Question: Question 8 is the one I need help with for my homework Answer questions 6 through 8 based upon the decision tree illustrated below (assume

Question 8 is the one I need help with for my homework

Question 8 is the one I need help with for my homework

Answer questions 6 through 8 based upon the decision tree illustrated below (assume throughout that this decision maker wants to maximize his expected payoD. Firm Z is trying to get chosen as the sole producer of a component by Firm 1'. Firm 2 has an initial decision to either \"Continue R&D\" or \"Abandon R&D.\" His RAID will be either a \"Success\" or \"Failure. \" Aer realizing either successful or failed him, Firm Z can either make a proposal (\"Proposal'j to Firm Y or not (\"No Proposal '9. if they choose to make a proposal they will either be chosen as the sole supplier of this component (\"Win\") or not chosen (\"Lose\"). $31 0,000 Proposal 15 10,000 Continue R&D No Proposal $81 0,000 Proposal $10,000 $90,000 $W No Proposal 6. If Firm 2 were to \"Continue R&D\" but the R&D is a \"Failure,\" they should A. choose \"Proposal.\" B. choose \"No Proposal.\" C. choose \"Proposal\" if p is \"relatively large\" but choose \"No Proposal\" if p is \"relatively small." D. choose \"Proposal\" if p is \"relatively small\" but choose \"No Proposal\" if p is \"relatively large.\" 7. Suppose \"p\" is equal to .35. The value of \"'W' which makes the rm indifferent between choosing \"Continue R&D\" and \"Abandon FIELD\" is (i.e., the rm would want to choose \"Continue R&D\" if and only if \"W\" is greater than or equal to ). A. $90,000 B. $140,000 C. $155,000 D. $210,000 8. Suppose \"W\" is equal to $160,000. The value of \"p\" which makes the rm indifferent between choosing \"Continue R&D\" and \"Abandon R&D\" is (i.e., the rm would want to choose \"Continue R&D\" if and only if \"p\" is greater than or equal to j. A. .1 B. .375 C. .45 D. .875

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