Your firm faces random future demand, but you must commit to a production decision today given the time it takes to produce a finished product.Your costs of production for any amount of output Q to produce to take to market are C(Q) = 175,000 + 20Q + (1/4)Q², with dC(Q)/dQ = 20 + (1/2)Q.You expect demand to be high, Q = 1000 - P, with probability 0.8.Demand will be low, Q = 800 - P, with probability 0.2.You manage a profit maximizing firm.

8.Given your profit maximizing production level, the maximum price you will be able to charge if demand is high equals:

a)424b) 584*c) 624d) 776e)824

9.If demand is low, your profit will equal:

* a)- 58,440b) - 24,660c) 0d) 16,760e)42,820

10.Your maximum expected profit equals:

a)- 800b) 0* c) 1,720d) 4,220e)5,400

11.The standard deviation of your profit, a measure of risk for shareholders in your firm, equals:

a)15,840b) 21,660c) 28,820*d) 30,080e) 34,060