An Apple Farmer Must Decide How Many Apples to Harvest

question 43

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 $1.50,and a one-third probability that it will be $2.His cost function is C(Q) = 0.01Q².The farmer's maximum expected profit is:

• A) −$7.75.
• B) $0.
• C) $7.75.
• D) None of the answers are correct.

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Definitions:

Automatization

The process of making an action or process automatic, often through practice or technology, decreasing the need for conscious involvement.

Memory Processing

The series of actions that the brain undertakes to encode, store, and retrieve information.

Legal Purposes

Refers to activities or actions that are carried out in accordance to the law or intended to fulfill legal requirements.

Recollections

The action of remembering something or the process of bringing past experiences or events back into one’s mind.