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Case Study: Visual Park is considering marketing one of its two television models for coming Christmas season: Model A or Model B. Model A is a unique featured television and appears to have no competition. Estimated profits (in thousand dollars) under high, medium, and low demand are given below:
Demand
Model A
High
Medium
Low
Profit
1200
900
500
Probability
0.2
0.6
Visual Park is optimistic about the TV Model B. However, the concern is that profitability will be affected if a competitor launches a TV model which has similar features as Model B. Estimated profits (in thousand dollars) with and without competition is as follows:
Model B
With competition
0.3
0.5
Without competition
1600
1100
700
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