We know that good weather and bad weather have the same probability, but different market prices. I am not sure how to account for this difference on this problem. Thank you for your help!

#2. Market price for caviar depends on weather: $30 per pound under good weather and $20 per pound under bad weather. A small caviar producer has a cost function given by C = 0.5g2 + Sq + 100, where q is the weekly caviar production. Production decision must be made before the weather is known, but it is known that good and bad weather each occur with a probability of 0.5. a. How much caviar should this firm produce if it wishes to maximize the expected value of its profits (expected profits)? What is the maximum expected profits in this case? b. Suppose the owner of this firm has a utility function U05) = , where :r is weekly profits. Express the expected utility as a function of q. c. Suppose this firm could predict next week's price. What strategy would maximize expected profits (not expected utility) in this case? What would the maximum expected profits be in this case? Explain why this maximum expected profits is larger than the maximum expected profits in part (a)