Answer Happy

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 High Medium Low Profit $1,100 $600 $300 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. Probability Space Pirates With Competition High Profit 0.2 Profit Demand Space Pirates Without Competition Battle Pacific Space Pirates 0.5 Demand Medium Low $700 $400 $200 0.3 0.3 0.4 Probability (a) Develop a decision tree for the company's problem. Decision Tree Description Demand High Medium Low $1,500 $700 $400 0.5 High 0.2 0.3 Medium 0.5 Low 0.3 With Competition 0.3 Without Competition, 0.2 High 0.3 Medium 0.4 Low 0.3 High 0.5 Medium 0.3 Low 0.2 $ $