Which of the following is the profit-maximizing approach to dealing with uncertainty? a)Base your decision on a simple average of the potential outcomes. b)Assume that the most likely state of the world will actually occur. c)Choose the potential outcome in the preferred state of the world and hope for the best. d)Make decisions that maximize expected profits

Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter27: Investment, The Capital Market, And The Wealth Of Nations
Section: Chapter Questions
Problem 15CQ
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Which of the following is the profit-maximizing approach to dealing with uncertainty? a)Base your decision on a simple average of the potential outcomes. b)Assume that the most likely state of the world will actually occur. c)Choose the potential outcome in the preferred state of the world and hope for the best. d)Make decisions that maximize expected profits
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