Using expected value what should ms johnson do

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Leah Johnson, director of Legal Services of Brookline, wants to increase capacity to provide free legal advice but must decide whether to do so by hiring another full-time lawyer or by using part-time lawyers.

The table below shows the expected costs of the two options for three possible demand levels:

		States Of Nature
Alternatives	Low Demand	Medium Demand	High Demand
Hire Full Time	$300	$500	$700
Hire Part Time	$0	$350	$1,000
Probabilities	.2	.05	.3

Using expected value, what should Ms. Johnson do?

Reference no: EM131850323

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