The computer-gaming market in the United States is estimated at $18.5 billion as of 2017.† Consider the case of a certai

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The Computer Gaming Market In The United States Is Estimated At 18 5 Billion As Of 2017 Consider The Case Of A Certai 1 (69.58 KiB) Viewed 35 times

The computer-gaming market in the United States is estimated at $18.5 billion as of 2017.† Consider the case of a certain computer- gaming company located in California. It is considering the production of one of two new video games for the coming holiday season: Battle Pacific or Space Pirates. Battle Pacific is a unique game and appears to have no competition. Estimated profits (in thousands of dollars) under high, medium, and low demand are as follows. Battle Pacific Profit Profit Probability High $1,100 Space Pirates 1 Probability The company is optimistic about its Space Pirates game. However, the concern is that profitability will be affected by a competitor's introduction of a video game viewed as similar to Space Pirates. Estimated profits (in thousands of dollars) with and without competition are as follows. Battle Pacific Demand 0.2 Space Pirates Medium Space Pirates With Competition High Medium Low $700 $400 $600 0.3 0.5 Demand 0.4 0.5 Without Competition High Medium Low Profit $1,500 Probability (a) Develop a decision tree for the company's problem. Decision Tree Description High 0.2 Low $300 0.3 Medium 0.5 Low 0.3 Demand With Competition $200 $700 0.3 0.3 Without Competition $400 0.2 S610 $430 $ 1040 High 0.3 Medium Low 0.3 High 0.5 Medium 0.3 Low 0.2 x x x S