Question: points As the manager of Smith Construction. you need to make a decision on the number of homes to build in a new residential area


points As the manager of Smith Construction. you need to make a decision on the number of homes to build in a new residential area where you are the only builder. Unfortunately. you must build the homes before you learn how strong demand is for homes in this large neighborhood. There is a 60 percent chance of low demand and a 40 percent chance ofhigh demand. The corresponding linuerse] demand functions for these two scenarios are P= 300.000 - 4-000 and P= 500.000 - 2360. respectively. Your cost function is (10} = 140.000 + 240.0000. How ma ny new homes should you build. and what prots can you expect? Number of homes you should build: |:| homes Profits you can expect 3; |:|
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
