Use a Payoff Table or Decision Tree

question 7

Multiple Choice

Use a payoff table or decision tree.
-A farm owner in upstate New York who grows summer vegetables (e.g. tomatoes)
Must decide whether to employ additional pickers this season. If he does, he could hire
Either migrant workers or local teenagers who need summer employment. The migrant
Workers are more experienced, faster, but more expensive. Although the teenagers will
Work for less, they lack experience and tend to damage plants and produce. His profits
Depend on the growing season as shown below. Using the maximax approach, the farmer

• A) would hire migrant workers if the growing season is good.
• B) would hire teenagers.
• C) would not do any extra hiring.
• D) would hire migrant workers.
• E) would not do any extra hiring if the growing season is good.

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Definitions:

Discount Stores

Retail outlets that sell products at prices lower than those asked by traditional retail stores, often through selling in bulk or reducing overhead costs.

Low-Cost

A pricing strategy or characteristic indicating that something is relatively inexpensive or cheaper than alternatives.

Economies Of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.

Attracting New Buyers

The strategies and practices employed by businesses to appeal to and engage individuals or entities that have not previously purchased their products or services.