Find the Expected Value

question 76

Multiple Choice

Find the expected value.
-A contractor is considering a sale that promises a profit of $39,000 with a probability of 0.7 or a loss (due to bad weather, strikes, and such) of $3000 with a probability of 0.3. What is the expected profit?

• A)$29,400
• B)$36,000
• C)$27,300
• D)$26,400

Understand the condition under which a monopolistically competitive firm earns positive or negative economic profits.

Recognize the profit-maximization rule (MR = MC) for monopolistically competitive firms and its implications for firm operations.

Comprehend the relationship between a monopolistically competitive firm's demand curve, marginal revenue curve, and production decisions.

Identify the conditions for short-run and long-run equilibria in monopolistically competitive markets, including the role of economic profits or losses.

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