How many homes should you build and profits can you expect

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As the manager of smith construction you need to decide on the number of homes to build in a new residential area where you are the only builder. Unfortunately you must build the homes before you learn how strong the demand is for the home in large neightborhood. There is 50% chance demand is low and 50% chance demand is high Deciding to build homes demand function P= 200,000 - 250Qand P= 400,000 -250Q THE COST FUNCTION IS C(Q)110,000+200,000Q

How many homes should you build and what profits can you expect

Reference no: EM13155389

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