The final paper is based on the analysis of the decision tree method and its application in economics. The application of the decision tree will be shown on a practical example. There are different types of decision making depending on the amount of information known to the individual making the decision, the decision tree is used under conditions of risk and uncertainty. It will also show the assumptions that must be known to the decision maker before they decide to use the decision tree. The paper will show how the decision tree is constructed and the advantages and disadvantages of using the decision tree. Relevant data from secondary sources found in professional literature, theses and online sources were used. The final paper showed that the decision tree is a useful tool for decision-making, but in practice a larger amount of information will be taken when constructing the decision tree, in this paper a simpler model was used to show how the decision tree works. Certain advantages and disadvantages of the decision tree are presented, and it is stated that certain disadvantages of the decision tree can be substituted by combining the decision tree with other methods. It can be concluded from the paper that the decision tree method is suitable for use by most people who make business decisions. When combined with other methods, it becomes an even more powerful tool for decision-making, and with proper use, it puts the power of decision-making information in the palm of their hands.