SCENARIO 12-1 You Are Making a Decision Whether to Discontinue

question 19

Multiple Choice

SCENARIO 12-1 You are making a decision whether to discontinue research on a new drug.This new drug would save lives, but it is uncertain whether it can be developed within a reasonable time frame and at a reasonable cost.Your firm has already spent a small fortune on this drug.You have gathered so much information in preparation for making the decision that you are unable to sort the good information from the superfluous.
You decide to spend more money on the project, even though you believe it to be improbable that you will succeed.You are guilty of

• A)availability heuristic.
• B)representative heuristic.
• C)escalation of commitment.
• D)satisficing.
• E)ignoring the base rate.

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Definitions:

Unique Product

A product that offers a distinct set of qualities or features not possessed by similar products in the market, providing a competitive advantage.

Purchasing Product

The act of acquiring goods or services by customers in exchange for money, reflecting consumer behavior and market demand.

Benefit

An advantage, improvement, or gain that is obtained from something.