[HiPearl]

please help me out to solve these questions: with reasons

I) Which of the following are drawbacks of the decision rule to choose the option with the highest expected value:

a) The method is too concerned with the need to avoid losses.
b) The method is concerned only with making the greatest possible profit.
c) the method ignores less likely outcomes.
d) The method takes no account of risk aversion.


II) Which if the following statement is correct:
a) If there is no Scarce resource and the company has spare capacity, the minimum price of a product is the full cost of making it.
b) If there is scarce resources and a company makes more than one product , the minimum price of the produce is the incremental cost of making it.
c) the minimum price simply has to cover the incremental costs of producing and selling the item.
d) all of the above

[Curlyben]

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