P-TV and QRS-TV Are Trying to Decide Whether to Air

question 22

Multiple Choice

P-TV and QRS-TV are trying to decide whether to air a sit-com or a reality show in a given time slot. Viewers like both sit-coms and reality shows, but sit-coms are more expensive to produce than reality shows since real actors need to be hired. QRS-TV makes its decision first, and then P-TV observes that choice before making its decision. Both stations know all of the information in the decision tree below. Given the information in this decision tree, if QRS-TV announces that it will air a reality show, it can expect to:

• A)lose $5 million.
• B)earn $5 million.
• C)earn $10 million.
• D)earn $20 million.

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Definitions:

Decision Points

Critical moments within a process where a choice must be made that will affect the outcome.

Linear Regression

A statistical method used to model the relationship between a dependent variable and one or more independent variables by fitting a linear equation to observed data.

Bar Charts

A graphical representation of data using rectangular bars of varying lengths, indicating different values or categories.

Pie Charts

A circular statistical graphic divided into slices to illustrate numerical proportion.