Unicorn Medical Devices Is Developing a New Technology

question 2

Multiple Choice

Unicorn Medical Devices is developing a new technology.After initial development of the device,the company must test it.If the tests go well and the device is successful,it can be marketed immediately.If the tests do not go well,Unicorn will revise the original device and repeat the process.The outcome of the tests is on a(n) ________ in a decision tree.

• A)decision node
• B)information node
• C)either node;it does not matter
• D)This question cannot be answered without a graphical representation of the decision tree.

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Definitions:

Demand Function

A mathematical function showing the relationship between the quantity demanded of a good and its price, holding other factors constant.

Reaction Function

The strategic response of one player in a game to the actions of another, typically used in the context of oligopoly market structures.

Marginal Cost

The increase in total production costs that comes from making one additional unit of a product.

Demand Function

A mathematical representation that describes the relationship between the quantity of a good demanded and its price, along with other determinants.