A Firm Making Production Plans Believes There Is a 30

Multiple Choice

A firm making production plans believes there is a 30% probability the price will be $10,a 50% probability the price will be $15,and a 20% probability the price will be $20.The manager must decide whether to produce 6,000 units of output A) ,8,000 units B) or 10,000 units C) .The following table shows 9 possible outcomes depending on the output chosen and the actual price. If the mean-variance rule is used,how much should the firm produce?

A) 6,000
B) 8,000
C) 10,000
D) cannot use this rule to make the decision