00TMiles is considering buying a new pickup truck for his lawn service firm. The economy in town seems tobe growing, and he is wondering whether he should opt for a subcompact, compact, or full-size pickuptruck. The smaller truck would have better fuel economy, but would sacrifice capacity and somedurability. A friend at the Bureau of Economic Research told him that there is a 30% chance of lowergas prices in his area this year, a 20% chance of higher gas prices, and a 50% chance that gas prices willstay roughly unchanged.Based on this information, Miles has developed a decision table that indicates the profit amount hewould end up with after a year for each combination of truck and gas prices.States of NatureLower gasGas pricesHigher gasAlternativespricesunchangedpricesSubcompact000'000'6Compact000'0Full sizeProbability0.50.2MacBook Air000000DDF3F4F5F8OLV%232$9.7.4.J * 00TAlternativespricesunchangedpricesSubcompactCompact0000000'0000Full size000000'6000'9Probability0.30.50.2Which type of truck should Miles select based on Maximax Criterion?SubcompactCompactNoneO Full size* PreviousNextMacBook Air08F3000DDF2F5F6F8&232$3.4.9.

Solution: Maximax Criterion of decision theory: In maximax criterion first we find the maximum of…

Answered: 00 T Miles is considering buying a new…

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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