A Risk-Neutral Monopoly Must Set Output Before It Knows the Market

Multiple Choice

A risk-neutral monopoly must set output before it knows the market price.There is a 50 percent chance the firm's demand curve will be P = 40 − Q and a 50 percent chance it will be P = 60 − Q.The marginal cost of the firm is MC = 3Q.The expected profit-maximizing quantity is:

A) 5.
B) 10.
C) 25.
D) 50.