OJ's Orange Juice Produces Orange Juice to Sell in a Competitive

question 6

Multiple Choice

OJ's Orange Juice produces orange juice to sell in a competitive market.Given uncertainty in weather patterns,OJ has to determine how much juice to produce before knowing the competitive price.It is estimated that there is a 10 percent chance the competitive price will be $5 and a 90 percent chance the price will be $2.If the marginal cost of producing orange juice is MC(Q) = 2Q,then to maximize expected profits,OJ should produce:

• A) 0.25 units.
• B) 0.9 units.
• C) 1.15 units.
• D) 2.5 units.

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Definitions:

Money Supply

The aggregate sum of funds within an economy, encompassing cash, coins, and the amounts contained in checking and savings accounts.

Deposits On Reserve

Funds that banks must hold in reserve and not lend out, as required by central banking regulations.

Largest Bank

The bank with the highest level of assets or market capitalization within a particular geographic or regulatory jurisdiction.

Assets

Economic resources or valuable items owned by an individual or business, capable of being converted into cash or used to generate income.