Alternatives 1 and 2 in the Following Payoff Table Represent

question 18

Essay

Alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt.The level of demand affects the success of both strategies.The states of nature (S_I)represent the levels of demand for the company products.S₁,S₂,and S₃ characterize high,medium,and low demand,respectively.The payoff values are in thousands of dollars. The management believes that weather conditions significantly affect the level of demand.48 monthly sales reports are randomly selected.These monthly sales reports show 15 months with high demand,28 months with medium demand,and 5 months with low demand.12 of the 15 months with high demand had favorable weather conditions.14 of the 28 months with medium demand had favorable weather conditions.Only 1 of the 5 months with low demand had favorable weather conditions.If the weather conditions are favorable,determine which manufacturing strategy the company should implement.

Predict the market outcomes of shifts in supply and/or demand.

Assess the relationship between price changes and movements along or shifts of the supply and demand curves.

Identify the role of substitutes and complements on market dynamics.

Comprehend the effect of income changes on demand for normal and inferior goods.

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Definitions:

Subsequent

Pertaining to events or actions that occur after a specified point in time.

Statute of Frauds

A legal principle requiring certain contracts, such as those for the sale of land or goods over a certain value, to be in writing and signed by the party to be charged to be enforceable.

Consideration of Marriage

Consideration of marriage is the legal or moral obligation taken into account when entering into a marriage contract, often involving mutual promises or agreements that form the basis of the relationship.

Money Judgment

A court order requiring one party to pay a sum of money to another party as compensation for losses or damages.