An automobile manufacturer must make an immediate decision on the car size which should account for the majority of the firm's production two years from now. The firm perceives three possible states of nature at that time: S1, gasoline will be rationed; S2, gasoline will be readily available at close to current prices; and S3, gasoline will be readily available, but at much higher prices. The firm has determined the following profit payoff table (in $l,000s). 
a.An economist at the auto company has advised the firm that the probabilities of the states of nature are P(S1) = .2, P(S2) = .5, and P(S3) = .3. Find the expected value for the three decisions.
b.Which decision should be chosen under the expected value criterion?
c.Determine the expected value of perfect information.
Definitions:
Enzymes
Biological molecules that significantly speed up the rate of virtually all of the chemical reactions that take place within cells.
Business Suits
Formal attire typically worn in professional settings, consisting of a jacket and trousers or a skirt made from matching fabric.
Eleventh Century
The period extending from the year 1001 to 1100 in the Common Era, characterized by various historical and cultural developments worldwide.
Soap Production
The process of making soap, which typically involves the chemical reaction between a fat or oil and an alkali to produce glycerin and soap.
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