BUSOBA 2321 Midterm Question and
Answer [2026] | UPDATED ACTUAL
Exam | Complete Exam Prep
• profit = -✓✓ revenue - cost
• revenue = -✓✓ Price x Quantity
• costs = -✓✓ fixed costs + (quantity x variable costs)
• Profit line equation -✓✓ (P-VC) x Q - FC
• break even point graph -✓✓ FC= intercept
(P-VC)= slope
x intercept = break even point
• indifference point -✓✓ when total costs are equal to profit
• Steps to calculating indifference point -✓✓ 1) Determine Equations for each
2) Set each equation equal to each other and solve for Q
3) make indifference point table, set test points, plug back into equation
4) determine which points yield the highest profit
• MAXIMAX -✓✓ optimistic, choosing biggest return option (rows), then max of these
options
• MAXMIN -✓✓ pessimistic, choosing the smallest return option (rows), then take the
max of these options
• MINIMAX Regret -✓✓ 1) find best outcome for each state of nature (column)
2) determine the regret for each combo
- what you could have had - what you got aka
best payoff - actual payoff
3) find the max regret of each option (row)
4) take the min of these max'sperfec
• EMV stands for -✓✓ expected monetary value
• EMV 's are -✓✓ the lines on your graph
• how to find EMV -✓✓ Value (p) + Value (p-1)
Answer [2026] | UPDATED ACTUAL
Exam | Complete Exam Prep
• profit = -✓✓ revenue - cost
• revenue = -✓✓ Price x Quantity
• costs = -✓✓ fixed costs + (quantity x variable costs)
• Profit line equation -✓✓ (P-VC) x Q - FC
• break even point graph -✓✓ FC= intercept
(P-VC)= slope
x intercept = break even point
• indifference point -✓✓ when total costs are equal to profit
• Steps to calculating indifference point -✓✓ 1) Determine Equations for each
2) Set each equation equal to each other and solve for Q
3) make indifference point table, set test points, plug back into equation
4) determine which points yield the highest profit
• MAXIMAX -✓✓ optimistic, choosing biggest return option (rows), then max of these
options
• MAXMIN -✓✓ pessimistic, choosing the smallest return option (rows), then take the
max of these options
• MINIMAX Regret -✓✓ 1) find best outcome for each state of nature (column)
2) determine the regret for each combo
- what you could have had - what you got aka
best payoff - actual payoff
3) find the max regret of each option (row)
4) take the min of these max'sperfec
• EMV stands for -✓✓ expected monetary value
• EMV 's are -✓✓ the lines on your graph
• how to find EMV -✓✓ Value (p) + Value (p-1)
