(Table: Amy's Utility Function) Look at the Table Amy's Utility

question 51

Multiple Choice

(Table: Amy's Utility Function) Look at the table Amy's Utility Function.Amy is an entrepreneur with income equal to $40,000.Amy is considering development of a new product.The probability that her new product earns Amy $30,000 in additional income is 0.5, and the probability that Amy incurs a reduction of $10,000 from her current income is 0.5.Amy's
Expected income after developing her new product is:

• A)$45,000.
• B)$35,000.
• C)$50,000.
• D)$60,000.

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Definitions:

Reverse Auctions

Auctions in which one buyer, usually an organization, seeks to buy a product or a service, and suppliers submit bids; the lowest bidder wins.

Forward Auctions

An auction in which several buyers bid competitively for a seller's good or service, with the price increasing incrementally until the highest bid is reached.

Lower Prices

A strategy where a seller reduces the cost of their goods or services to attract more customers or undercut competitors.

Higher Prices

An economic condition signifying an increase in the cost of goods and services in the market.