Business, 24.08.2021 04:00 shikiaanthony

Suppose a risk-neutral competitive firm must set output before it knows for sure the market price. Suppose the market price is given by p = p* + e, where p* is the mean price and e is a random term with an expected value of zero. Then in order to maximize expected profits, the firm should produce where: a) p = MC.
b) p* = MC.
c) p* + e = MC.
d) p > MC.

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Suppose a risk-neutral competitive firm must set output before it knows for sure the market price. S...

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