Exhibit 14.11 The Following Questions Use the Information Below

question 1

Short Answer

Exhibit 14.11
The following questions use the information below.
A company is planning a plant expansion. They can build a large or small plant. The payoffs for the plant depend on the level of consumer demand for the company's products. The company believes that there is an 72% chance that demand for their products will be high and a 28% chance that it will be low. The company can pay a market research firm to survey consumer attitudes towards the company's products. There is a 76% chance that the customers will like the products and a 24% chance that they won't. The payoff matrix and costs of the two plants are listed below. The company believes that if the survey is favorable there is an 87% chance that demand will be high for the products. If the survey is unfavorable there is only a 25% chance that the demand will be high. The company has developed the following conditional probability table for their decision problem.
-Refer to Exhibit 14.11. What formula should go in cell C13 of the probability table?

---

Definitions:

Endorphins

Natural chemicals produced by the body to relieve stress and pain, often leading to feelings of euphoria.

Substance P

A neuropeptide involved in the transmission of pain and other sensory information in the nervous system.

Capsaicin

A chemical compound found in chili peppers that is responsible for their pungent flavor and spicy heat, also used therapeutically for its pain-relieving properties.

Vestibular System

A complex system located within the inner ear that helps maintain balance and spatial orientation.