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What are expected profits of the firm

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Question - A firm sells goods at the price of $150. Variable cost per unit equals $120 with certainty. However, fixed costs and the level of demand are uncertain. Namely, fixed costs can equally likely be $300, $600, or $1200. Demand can be: 60,000 units with probability 0.25, 20,000 units with probability 0.25, 10,000 units with probability 0.3, and 5,000 units with probability 0.2. What are expected profits of the firm?

Reference no: EM133030096

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