Multiple Choice
Happy Cows is a perfectly competitive dairy farm that has consistently faced a 50 percent chance of a high demand of $5 and a 50 percent chance of a low demand of $4. The managers of Happy Cows learn that there is now a 50 percent chance of a high demand of $8 and a 50 percent chance of a low demand of $2. All else equal, the change in the high and low demand values makes an accurate forecast _______valuable to Happy Cows as the firm stands to gain_______ profit from an accurate forecast.
A) less; less
B) less; more
C) more; less
D) more; more
Correct Answer:
Verified
Correct Answer:
Verified
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