1. As the manager of We Do It Right Construction, you need to make a decision on how many homes to build in a new residential area. There is a 20 percent chance of a recession, a 60 percent chance the economy will remain as it is, and a 20 percent chance there will be an economic upturn. If a recession hits, your inverse demand curve for new homes will be P=100,000-40. If things remain as they are, your inverse demand curve will be P=115,000- 30. If economic growth occurs, your inverse demand curve will be P=130,000-20. Your cost function in all three scenarios is C(O)=70,000+20+0.50% . If you are a risk neutral, how many homes will you start? [10 marks]