Philip Musa can build either a large electronics sec-tion or a small one in his Birmingham drugstore. He can also gather additional information or simply do nothing. If he gath-ers additional information, the results could suggest either a favorable or an unfavorable market, but it would cost him $3,000 to gather the information. Musa believes that there is a 50–50 chance that the information will be favorable. If the market is favorable, Musa will earn $15,000 with a large section or $5,000 with a small one. With an unfavorable electronics market, how-ever, Musa could lose $20,000 with a large section or $10,000 with a small section. Without gathering additional information, Musa estimates that the probability of a favorable market is .7. A favorable report from the study would increase the prob-ability of a favorable market to .9. Furthermore, an unfavora-ble report from the additional information would decrease the probability of a favorable market to .4.