What Is the EMV for Option 2 in the Following

question 104

Multiple Choice

What is the EMV for Option 2 in the following decision table? States of Nature
$$\begin{array} { | c | c | c | } \hline \text { Alternatives } & \mathrm { S } _ { 1 } & \mathrm {~S} _ { 2 } \\\hline \mathrm { p } & .6 & .4 \\\hline \text { Option } 1 & 200 & 300 \\\hline \text { Option } 2 & 50 & 350 \\\hline\end{array}$$

• A) 50
• B) 100
• C) 170
• D) 200
• E) 350

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Definitions:

Economically Most Efficient

A situation or method that yields the maximum output without wasting resources.

Labor And Capital

The two primary factors of production; labor represents human contribution, while capital includes tools, equipment, and technology used in production.

Minimize Production Costs

The process of reducing the expenses associated with manufacturing products or providing services without compromising quality.

Competitive Pressures

Forces that compel businesses to compete more effectively through pricing, innovation, and improved quality to gain or maintain market share.