PhilippinesYou're the manager of global opportunities for a U.S. manufacturer that is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, the Philippines, and Singapore as described in the following table: Success LevelBigMediocreFailureMalaysia Probability0.30.20.5Units1,100,000352,0000Philippines Probability0.30.30.4Units1,300,000650,0000Singapore Probability0.70.10.2 Units600,000360,0000 The product sells for $20, and each unit has a constant marginal cost of $16. Assume that the (fixed) cost of entering the market (regardless of which market you select) is $500,000.In the following table, enter the expected number of units sold, and the expected profit, from entering each market.MarketExpected Number of Units SoldExpected ProfitMalaysia Philippines Singapore If you were to enter one of the previously described markets, which one would you enter in order to earn the highest expected profit?

a)Given that, The product selling price is $20 constant marginal cost is $16 The cost of entering…

Philippines You're the manager of global opportunities for a U.S. manufacturer that is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, the Philippines, and Singapore as described in the following table: Success Level Big Mediocre Failure Malaysia Probability 0.3 0.2 0.5 Units 1,100,000 352,000 0 Philippines Probability 0.3 0.3 0.4 Units 1,300,000 650,000 0 Singapore Probability 0.7 0.1 0.2 Units 600,000 360,000 0

Philippines You're the manager of global opportunities for a U.S. manufacturer that is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, the Philippines, and Singapore as described in the following table: Success Level Big Mediocre Failure Malaysia Probability 0.3 0.2 0.5 Units 1,100,000 352,000 0 Philippines Probability 0.3 0.3 0.4 Units 1,300,000 650,000 0 Singapore Probability 0.7 0.1 0.2 Units 600,000 360,000 0

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter17: Making Decisions With Uncertainty

Section: Chapter Questions

Problem 17.1IP

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	Success Level
Malaysia
Probability	0.3	0.2	0.5
Units	1,100,000	352,000	0
Philippines
Probability	0.3	0.3	0.4
Units	1,300,000	650,000	0
Singapore
Probability	0.7	0.1	0.2
Units	600,000	360,000	0

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Deborah is at the casino and is considering playing Roulette. In Roulette, a ball drops into one of 36 slots on a spinning wheel. 17 of the slots are red, 17 are black, and 2 are green. Each slot is equally likely and occurs with probability 1/36. Deborah bets $1.00 on black. If the ball drops into a black slot she receives $2.00 and if it drops into a red or green slot, she receives nothing. a) The expected value of Deborah’s bet (after subtracting the $1.00 she bet) is $________________ b) Given that Deborah makes this bet, is she risk adverse, risk neutral, or risk loving?
"Jay, a writer of novels, just has completed a new thriller novel. A movie company and a TV network both want exclusive rights to market his new title. If he signs with the network, he will receive a single lump sum of $1,480,000, but if he signs with the movie company, the amount he will receive depends on how successful the movie is at the box office.The probability of a small box office earning $203,000 is 0.27. The probability of a medium box office of $1,660,000 is 0.49, and the probability of a large box office of $2,950,000 is 0.24.Jay can send his novel to a prominent movie critic to assess the potential box office success. It will cost $20,000 to get the novel evaluated by the movie critic.The movie critic can have either a favorable or unfavorable opinion. The movie critic's reliability of predicting box office success is as follows.If the movie will have a large box office, there is a 0.75 probability the critic will have a favorable opinion.If the movie will have a medium…
You’re the manager of global opportunities for a U.S. Manufacturer, who is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, Philippines, and Singapore as described next: Success Level Malaysia Philippines Singapore Probability Units Probability Units Probability Units Big 0.3 1,200,000 0.3 1,000,000 0.7 700,000 Mediocre 0.3 600,000 0.5 320,000 0.2 400,000 Failure 0.4 0 0.2 0 0.1 0 The product sells for $10 and has unit costs of $8. If you can enter only one market, and the cost of entering the market (regardless of…
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	Success Level
Big	Mediocre	Failure
Malaysia
Probability	0.3	0.2	0.5
Units	1,100,000	352,000	0
Philippines
Probability	0.3	0.3	0.4
Units	1,300,000	650,000	0
Singapore
Probability	0.7	0.1	0.2
Units	600,000	360,000	0

Market	Expected Number of Units Sold	Expected Profit
Malaysia
Philippines
Singapore