A group of physicians have been approach by the market research firm that offers to perform a study of the market at a fee of $5,000. The market researchers claim that their experience enebles them to use Baye's theorem to make the following statements of probability:
• Probability of a favorable market given a favorable study= 0.82
• Probability of an unfavorable market given a favorable study= 0.18
• Probability of a favorable market given an unfavorable study= 0.11
• Probability of an unfavorable market given an unfavorable study= 0.89
• Probability of a favorable research study = 0.55
• Probability of an unfavorable research study = 0.45
a) Develop a new decision tree for the medical professionals to reflect the options now open with the market study
b) Use the EMV approach to recommend a strategy
c) What is the expected value of sample information? How much might the physicians be willing to pay for a market study?