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What he decides to do that the end of this very long speech is to go ahead and put on a play that will help him figure out whether Claudius is really guilty or if the ghost has just been sent by the devil to trick him (Hamlet).
He thinks of the play because he has just watched an actor give a performance. He berates himself for being so slow to act when even this actor can show all his emotion over something that is not even real. By contrast, Hamlet can't get angry enough over his father's death to do something about it.
That is what makes him think that a play is "the thing."
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