A Firm Is Making Production Plans for Next Quarter,but the Manager

Multiple Choice

A firm is making production plans for next quarter,but the manager does not know what the price of the product will be next month.She believes there is a 30 percent chance price will be $500 and a 70 percent chance price will be $750.The four possible profit outcomes are: $$\begin{array} { l c c } & \text { Profit (loss) when price is: } \\& \$ 500 & \$ 750 \\\hline \text { Oplian A produce } 1,000 \text { unids } & -\$ 12,000 & \$ 80,000 \\\text { Option } 8 \text { produce } 2,000 \text { unids }& -\$ 20,000 & \$ 150,000\end{array}$$
Which option is chosen using the coefficient of variation rule?

A) Option A
B) Option B
C) Both options have the same coefficient of variation (to two decimal places) .
D) cannot calculate expected profit with the given information