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Question $2$

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Question text

The following payoff table provides profits based on various possible decision alternatives and various levels of demand.

States of Nature

Demand

Alternatives

Low

Medium

High

Alternative $1$

$80$

$120$

$140$

Alternative $2$

$90$

$90$

$90$

Alternative $3$

$50$

$70$

$150$

The probability of a low demand is $0\mathrm{.}4,$ while the probability of a medium and high demand is each $0\mathrm{.}3.$

What decision would a pessimist make?

Select one:

a$.$

Alternatives $1$ and $2$

b$.$

Alternative $3$

c$.$

Alternative $2$

d$.$

Alternative $1$