You are a division manage who submits a budget to corporate headquarters (HQ) at the start of

each month. Based on that budget, HQ sends you the resources you request.

Revenues are expected to be $600,000 for the month.

Costs will be somewhere between $400,000 and $600,000 (inclusive). Moreover, the costs are

uniformly distributed, meaning that each potential realization of actual costs between $400,000

and $600,000 is equally likely.

Before you submit your budget, you know for certain what your divisions monthly costs will be.

However, HQ only knows that costs will be somewhere between $400,000 and $600,000

(inclusive), and that the costs are uniformly distributed in that range.

HQ earns profits equal to $600,000 less the resources you request in your budget.

You get to keep the difference between the amount of resources you request in your budget and

the actual costs for the month.

Suppose you learn that actual costs for the month are $500,000.

What amount of resources do you request in your budget (i.e., the amount youll get from HQ)?

Question: Budget: $