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: Which option has the higher expected profit?

A) Option A
B) Option B
C) Both Options have the same expected profit
D) cannot calculate expected profit with the given information