A business owner is trying to decide whether to buy, rent, or lease office space and has constructed the following payoff table based on whether business is brisk or slow. $$\begin{array} { l | c r }
\text { Alternative } & \text { Brisk } & \text { Slow } \
\hline \text { Buy } & 90 & - 10 \
\text { Rent } & 70 & 40 \
\text { Lease } & 60 & 55
\end{array}$$ The maximin strategy is
A) Buy.
B) Rent.
C) Lease.
D) Brisk.

Question

A business owner is trying to decide whether to buy, rent, or lease office space and has constructed the following payoff table based on whether business is brisk or slow. $$\begin{array} { l | c r } 
\text { Alternative } & \text { Brisk } & \text { Slow } \
\hline \text { Buy } & 90 & - 10 \
\text { Rent } & 70 & 40 \
\text { Lease } & 60 & 55
\end{array}$$ The maximin strategy is
A) Buy.
B) Rent.
C) Lease.
D) Brisk.

Quizplus · Accepted Answer

The maximin strategy involves choosing the option with the highest minimum payoff. For "Buy," the minimum payoff is -10; for "Rent," it's 40; and for "Lease," it's 55. Therefore, "Lease" is the maximin strategy because it has the highest minimum payoff of 55.

A Business Owner Is Trying to Decide Whether to Buy