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(Solved): ** 3-37 The physicians in Problem 3-36 have been approached by a market research firm that offers to ...
** 3-37 The physicians in Problem 3-36 have been approached by a market research firm that offers to perform a study of the market at a fee of
$5,000. The market researchers claim their experience enables them to use Bayes' Theorem to make the following statements of probability: Q
Probability of a favorable market given
a favorable study =0.82
Probability of an unfavorable market given
a favorable study =0.18
Probability of a favorable market given
an unfavorable study =0.11
Probability of an unfavorable market given
an unfavorable study =0.89
Probability of a favorable research study =0.55
Probability of an unfavorable research study =0.45a. Develop a new decision tree for the medical professionals to reflect the options now open with the market study. b. Use the EMV approach to recommend a strategy. c. What is the expected value of sample information? How much might the physicians be willing to pay for a market study? d. Calculate the efficiency of this sample information.
