Firm A is calculating the expected benefit of investing in a new communications technology standard. There is a 30% probability that Firm B will also invest in the technology, and a 70% probability that Firm B will not invest. If both Firm A and Firm B choose to invest, profits will be $500 for each firm. If neither firm invests, profits will remain at $250 for each firm. If Firm A chooses to invest and Firm B does not invest, Firm As profit is -$100 and Firm Bs profit is $200. If Firm A does not invest and Firm B does invest, Firm As profit is $200 and Firms B profit is -$100. The expected benefit to Firm A of investing is ___________.___.

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     $80
      $110
      $200
      $500
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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$80
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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