You are the manager of a firm that sells a commodity in a market that resembles perfect competition, and your cost function is C(Q) = 3Q + 2Q2 . Unfortunately, due to production lags, you must make your output decision prior to knowing for certain the price that will prevail in the market. You believe that there is a 65% chance the market price will be $300 and a 35% chance it will be $800.

(a) Calculate the expected market price. $__________

(b) What output should you produce in order to maximize expected profits? ________ units

(c) What are your expected profits? $ ___________