P-TV and QRS-TV are trying to decide whether to air a sitcom or a reality show in a given time slot. Viewers like both sitcoms and reality shows, but sitcoms 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 sitcom, it can expect to:
A. earn $20 million.
B. earn $5 million.
C. lose $5 million.
D. earn $10 million.
Answer: B
You might also like to view...
Your friend Harry has quit his $20,000-a-year job to start a business that rents fishing boats. He asks you to lend him $50,000 and agrees to pay you a 10% return on your $50,000 if he earns a profit
During the first year Harry's total revenue is $120,000 and his total cost for equipment and supplies are $100,000 . Harry tells you that he cannot pay you any interest this year because he did not earn a profit. Is your friend Harry trying to cheat you?
Aggregate supply is the:
A. total quantity of the production of all the households in the economy. B. market value of the total quantity of goods and services supplied in the economy. C. total quantity of goods and services demanded in the economy. D. market value of the total quantity of goods and services demanded in the economy.