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Malaysia 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: Malaysia Probability Units Philippines Probability Units Singapore Big Success Level Mediocre Failure 0.7 0.1 1,300,000 416,000 0.2 0.3 600,000 360,000 0.2 0.5 0

Malaysia 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: Malaysia Probability Units Philippines Probability Units Singapore Big Success Level Mediocre Failure 0.7 0.1 1,300,000 416,000 0.2 0.3 600,000 360,000 0.2 0.5 0

Managerial Economics: A Problem Solving Approach
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 6MC
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Malaysia 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: Malaysia Probability Units Philippines Probability Units Singapore Probability Units Big Success Level Mediocre 0.7 1,300,000 0.2 600,000 0.1 416,000 0.3 360,000 0.4 0.3 1,500,000 750,000 Failure 0.2 0 0.5 0 0.3 0 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.
Transcribed Image Text:Malaysia 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: Malaysia Probability Units Philippines Probability Units Singapore Probability Units Big Success Level Mediocre 0.7 1,300,000 0.2 600,000 0.1 416,000 0.3 360,000 0.4 0.3 1,500,000 750,000 Failure 0.2 0 0.5 0 0.3 0 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. Expected Profit Market Expected Number of Units Sold Malaysia 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? Philippines Singapore Malaysia
Transcribed Image Text:In the following table, enter the expected number of units sold, and the expected profit, from entering each market. Expected Profit Market Expected Number of Units Sold Malaysia 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? Philippines Singapore Malaysia
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