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Deviation
- Difference between the expected and actual payoff
- Adjusting for the negative numbers
- The standard deviation measures square root of average of squares of the deviations of the payoffs associated with every outcome from their expected value.
- The standard deviation can be given by:
reason for kinked demand curve
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Determinants of reserve price
An economy can produce a maximum of either 28 million tons of wheat or 7,000 automobiles, or various intermediate quantities, as depicted in the table below:
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