**Decision Making for Opening a Bakery**Dillon DeMarco is considering opening a small Italian bakery in the nearby mall, close to the Italian section of the city. He has chosen a strategic location where he believes there will be interest in the bakery. However, Dillon is unsure about the level of interest and is weighing his options between a small, medium, or large shop. The decision is influenced by the state of the economy in the coming year, affecting customers' spending on his Italian delicacies.**Economic Probabilities:**- Strong Economy: 20%- Average Economy: 30%- Bad Economy: 50%**Decision Table:**| Alternatives | Strong Economy | Average Economy | Bad Economy ||---------------|----------------|-----------------|-------------|| Small Shop | $25,000 | $18,000 | $30,000 || Medium Shop | $50,000 | $50,000 | $45,000 || Large Shop | $85,000 | $66,000 | $48,500 |The potential payoffs for each shop size are influenced by the economy's state.**Task:**Calculate the Expected Monetary Values (EMV) for each alternative using the given probabilities.**Answer:**To find the EMV for each shop option, use the formula:\[ \text{EMV} = (\text{Payoff in Strong Economy} \times \text{Probability of Strong Economy}) + (\text{Payoff in Average Economy} \times \text{Probability of Average Economy}) + (\text{Payoff in Bad Economy} \times \text{Probability of Bad Economy}) \]1. **EMV (small shop) = $"".**2. **EMV (medium shop) = $"".**3. **EMV (large shop) = $"".**Fill in the calculations for the EMVs based on the provided formula and data.

Answered: Dillon DeMarco is considering opening a…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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