Refer to the following:
A firm making production plans believes there is a 30% probability the price will be $10, a 50% probability the price will be $15, and a 20% probability the price will be $20. The manager must decide whether to produce 6,000 units of output (A) , 8,000 units (B) or 10,000 units (C) . The following table shows 4 possible outcomes depending on the output chosen and the actual price.
-What is the variance if 6,000 units are produced?
A) 490,000
B) 176,400
C) 100,000
D) 68,200
E) 76,460
Correct Answer:
Verified
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