A Perfectly Competitive Firm Has a Random Demand with a 90

question 148

Multiple Choice

A perfectly competitive firm has a random demand with a 90 percent chance of being $100, a 5 percent chance of $90, and a 5 percent chance of being $80. What is the firm's expected marginal revenue?

• A)$96.40
• B)$92.75
• C)$98.50
• D)$90.50

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Definitions:

Long-Term Financial Plans

Strategies and financial goals set by a business or individual for a period extending beyond one year.

Budgets

Financial plans that outline expected revenues and expenditures for a specific period of time.

Informal Plan

An unstructured and often unofficial approach to managing or addressing tasks, projects, or problems, lacking formal documentation or procedure.

Budgeting

The process of creating a plan to spend your money, outlining projected income versus expenses for a given period.