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A Firm Is Considering the Decision of Investing in New

question 44

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A firm is considering the decision of investing in new plants.The following is the profit payoff matrix under three conditions: it does not expand,it builds two new plants,or it builds one new plant.Three possible states of nature can exist--no change in the economy,the economy contracts and the economy grows.The firm has no idea of the probability of each state. A firm is considering the decision of investing in new plants.The following is the profit payoff matrix under three conditions: it does not expand,it builds two new plants,or it builds one new plant.Three possible states of nature can exist--no change in the economy,the economy contracts and the economy grows.The firm has no idea of the probability of each state.   What decision would be made using the minimax regret rule? A) no new plants B) one new plant C) two new plants D) not enough information to tell What decision would be made using the minimax regret rule?


Definitions:

Resting Potential

The electrical potential of a neuron when it is not active, representing the difference in charge between the inside and outside of the cell.

Axon Terminal

Bulbous end of the axon where signals move from the axon of one neuron to the dendrites or cell body of another.

Dendrites

The branched extensions of a neuron that receive signals from other neurons or sensory receptors and convey them toward the cell body.

Synapse

The junction between two neurons or between a neuron and a muscle cell, where electrical or chemical signals are transmitted from one cell to another.

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