As the Manager of We Do It Right Construction,you Need

question 35

Essay

As the manager of We Do It Right Construction,you need to make a decision on how many homes to build in a new residential area.There is a 20 percent chance of a recession,a 60 percent chance the economy will remain as it is,and a 20 percent chance there will be an economic upturn.If a recession hits,your inverse demand curve for new homes will be P = 100,000 - 4Q.If things remain as they are,your inverse demand curve will be P = 115,000 - 3Q.If economic growth occurs,your inverse demand curve will be P = 130,000 - 2Q.Your cost function in all three scenarios is C(Q)= 70,000 + 2Q + 0.5Q².If you are risk neutral,how many homes will you start?

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Definitions:

Naturalistic Observation

The practice of observing subjects in their natural environments without any manipulation by the observer.

Correlational Studies

Research methods that explore the relationship between two or more variables to determine if a statistically significant association exists, without assuming causality.

Experiment

A scientific procedure undertaken to make a discovery, test a hypothesis, or demonstrate a known fact, typically involving the manipulation of variables under controlled conditions.

Random Sample

A selection method where every member of a population has an equal chance of being included in the sample, decreasing bias in data collection.