ECISION TREE ANALYSIS FOR EXPECTED VALUE OF INFORMATIONA major use of decision tree analysis is to estimate the expected value of information. We will use the following simple example to illustrate the application process. A CEO needs to decide whether to invest $5 million to improve an existing product, which is sure to yield a profit of $7 million, or to develop a new product, which will yield a profit of $15 million if successful or $0 if not successful. A consultant offers to conduct a market forecast for the new product for a fee of $0.5 million. Should the CEO hire the consultant and in which product should the CEO invest

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.