I1. A rm is making its production plans for next quarter, but the manager of the rm does not know what the price of the product will be next month. He believes that there is a 30 percent probability the price will be $100 and a 70 percent probability the price will be $125. The manager must decide whether to produce 50,000 units or 60,000 units of output. The following table shows the four possible profit outcomes, depending on which output management chooses and which price actually occurs: Prot (loss) when price is $100 $125 Option A: produce 50,000 units $15,000 $500,000 Option B: produce 60,000 units $25,000 $750,000 a. If the manager chooses the option with the higher expected prots, which output is chosen? b. Which option is mo e 's ? c. What is the decision if the manager uses the meanvariance rules to decide between the two options? 6!. What is the decision using the coefcient of variation rule? Suppose the manager has absolutely no idea about the probabilities of the two prices occurring. Which option would the manager choose under each of the following rules? 0 Maximax rule - Maximin rule 0 Minimax regret rule 0 Equal probability rule