An Apple Farmer Must Decide How Many Apples to Harvest

question 67

Multiple Choice

An apple farmer must decide how many apples to harvest for the world apple market.He knows that there is a one-third probability that the world price will be $1, a one-third probability that it will be $1.5, and a one-third probability that it will be $2.His cost function is C(Q) = 0.01Q².What is the expected price in the world apple market?

• A)$1.5.
• B)$1.8.
• C)$2.0.
• D)$1.4.

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Definitions:

Sensations

Perceptions or feelings resulting from the stimulation of the sensory organs by the external environment.

Brain

The complex organ located in the skull that coordinates mental functions, interprets sensory information, and directs behavior.

Reflex

An involuntary and automatic reaction or response to a stimulus.

Stimulus

An external factor or event that provokes a response or reaction from a biological organism or system.