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Problem: You are the manager of firm that sells "commodity" in a marker that resembles perfect competitions, and your cost function is C(Q) = 2Q+3Q^2 . Unfortunately, due to production lags, you must make your output decision prior to knowing for certain the price that will prevail in the market. You believe that there is a 70 percent chance the market price will be $200 and a 30 percent chance it will be $600. Explain your answers and provides examples.

Macroeconomics, Economics

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