a) The company must make its plant decision now, before it will know what the market response will be. Which plant size maximizes its expected profit? b) Now suppose the company has a third option: building a modular plant. This is the same size as the small plant but is built so it can be expanded to the size of the large plant at a later date. The modular plant costs $4 million more to build than the small plant, but it allows the company the flexibility to observe the market response to the new product and immediately expand its capacity if demand warrants it. (Note: If the modular plant is expanded, the firm's total cost is also $4 million more than building a large plant in the first place.) Should the company choose to build the modular plant? c) Suppose that the firm can take a small-scale market survey that will help it forecast market demand. The test has two possible outcomes: positive or negative. In the past, products that went on to enjoy strong demand received positive test market scores in 4 of