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Hi John
I calculated EVs for each options, I’v got the EV without perfect info is 775 lunches, with perfect info will be 450 lunches, (I choose the lowest EV ) but the answer is £1839.50, why?
Thanks.
You need to watch my free lecture on the value of perfect information.
With perfect information there are still 4 possible levels of demand that can result (with the given probabilities). It is just that we will know which of the 4 before we decide on the supply level and can therefore choose the best level for each possible level of demand.
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