All categories

2 years ago

Refer to the following formula for expected payoff:

Mathematics

1 answer:

emmasim [6.3K]2 years ago

4 0

Answer:

Step-by-step explanation:

From the given information:

The price reduction = 98% = 0.98

$Then \ the \ expected \ payoff \ = \[(probability \ of \ matching \ price \ reduction \ * \ size \ of \ loss \ from \ price \ cuts \ ) \ + \ ( \ probability \ o f \ rivals\ not \ matching \ * \ gain \ from \ price \ cuts )]$

where;

P(rival not matching ) = (100 - 98)% = 2%

P(rival not matching ) = 0.02

The expected payoff = [(0.98 * -800) + (0.02*50000)]

The expected payoff = [( -784+ 1000)]

The expected payoff = 216

(b) Probability of rivals reducing price = 5%

= 5/100

= 0.05

∴

Probability of rivals reducing price = 1 - 0.05 = 0.95

The expected payoff = (0.05 * -6000) + (0.95 *0)

The expected payoff = -300 + 0

The expected payoff = -300

Based on answers (a) and (b), the firm should cut the price.

You might be interested in

Can i have some help i need to find the surface area

makkiz [27]

Answer:

644ft^2

Step-by-step explanation:

Area of triangle=1/2bh

Area of square=l*l

so we have;

4 triangles with a base of 14ft and height of 16ft and 1 square with l=14ft

AreaTriangle=1/2(14ft)(16ft)=112ft*4=448ft^2

AreaSquare=14ft*14ft=196ft^2

Area Total=448ft+196ft=644ft^2

7 0

3 years ago

Find all possible values of α+

const2013 [10]

Answer:

$\rm\displaystyle 0,\pm\pi$

Step-by-step explanation:

please note that to find but α+β+γ in other words the sum of α,β and γ not α,β and γ individually so it's not an equation

===========================

we want to find all possible values of α+β+γ when tanα+tanβ+tanγ = tanαtanβtanγ to do so we can use algebra and trigonometric skills first

cancel tanγ from both sides which yields:

$\rm\displaystyle \tan( \alpha ) + \tan( \beta ) = \tan( \alpha ) \tan( \beta ) \tan( \gamma ) - \tan( \gamma )$

factor out tanγ:

$\rm\displaystyle \tan( \alpha ) + \tan( \beta ) = \tan( \gamma ) (\tan( \alpha ) \tan( \beta ) - 1)$

divide both sides by tanαtanβ-1 and that yields:

$\rm\displaystyle \tan( \gamma ) = \frac{ \tan( \alpha ) + \tan( \beta ) }{ \tan( \alpha ) \tan( \beta ) - 1}$

multiply both numerator and denominator by-1 which yields:

$\rm\displaystyle \tan( \gamma ) = - \bigg(\frac{ \tan( \alpha ) + \tan( \beta ) }{ 1 - \tan( \alpha ) \tan( \beta ) } \bigg)$

recall angle sum indentity of tan:

$\rm\displaystyle \tan( \gamma ) = - \tan( \alpha + \beta )$

let α+β be t and transform:

$\rm\displaystyle \tan( \gamma ) = - \tan( t)$

remember that tan(t)=tan(t±kπ) so

$\rm\displaystyle \tan( \gamma ) = -\tan( \alpha +\beta\pm k\pi )$

therefore when k is 1 we obtain:

$\rm\displaystyle \tan( \gamma ) = -\tan( \alpha +\beta\pm \pi )$

remember Opposite Angle identity of tan function i.e -tan(x)=tan(-x) thus

$\rm\displaystyle \tan( \gamma ) = \tan( -\alpha -\beta\pm \pi )$

recall that if we have common trigonometric function in both sides then the angle must equal which yields:

$\rm\displaystyle \gamma = - \alpha - \beta \pm \pi$

isolate -α-β to left hand side and change its sign:

$\rm\displaystyle \alpha + \beta + \gamma = \boxed{ \pm \pi }$

when is 0:

$\rm\displaystyle \tan( \gamma ) = -\tan( \alpha +\beta \pm 0 )$

likewise by Opposite Angle Identity we obtain:

$\rm\displaystyle \tan( \gamma ) = \tan( -\alpha -\beta\pm 0 )$

recall that if we have common trigonometric function in both sides then the angle must equal therefore:

$\rm\displaystyle \gamma = - \alpha - \beta \pm 0$

isolate -α-β to left hand side and change its sign:

$\rm\displaystyle \alpha + \beta + \gamma = \boxed{ 0 }$

and we're done!

8 0

2 years ago

Read 2 more answers

The length of a rectangle is 6 in. more than the width. The perimeter of the rectangle is 24 in. Find the dimensions of the rect

klasskru [66]

1. First, let us define the width of the rectangle as w and the length as l.

2. Now, given that the length of the rectangle is 6 in. more than the width, we can write this out as:

l = w + 6

3. The formula for the perimeter of a rectangle is P = 2w + 2l. We know that the perimeter of the rectangle in the problem is 24 in. so we can rewrite this as:

24 = 2w + 2l

4. Given that we know that l = w + 6, we can substitute this into the formula for the perimeter above so that we will have only one variable to solve for. Thus:

24 = 2w + 2l

if l = w + 6, then: 24 = 2w + 2(w + 6)

24 = 2w + 2w + 12 (Expand 2(w + 6) )

24 = 4w + 12

12 = 4w (Subtract 12 from each side)

w = 12/4 (Divide each side by 4)

w = 3 in.

5. Now that we know that the width is 3 in., we can substitute this into our formula for length that we found in 2. :

l = w + 6

l = 3 + 6

l = 9 in.

6. Therefor the rectangle has a width of 3 in. and a length of 9 in.

8 0

3 years ago

A bottle contains 2 quarts of cooking oil. A chef uses 1/12 quart of cooking oil each day. How many days will the bottle of cook

klio [65]

It would last 24 days

7 0

3 years ago

Can anyone help me with this fraction x/-4 = 9 =

olasank [31]

Answer: x= -36

Step-by-step explanation:

-36/-4=9

5 0

2 years ago