A risk-neutral monopoly must set output before it knows the market price. There is a 50 percent chance the firm's demand curve will be P = 40 − Q and a 50 percent chance it will be P = 60 − Q. The marginal cost of the firm is MC = 3Q. The expected profit-maximizing price is
Multiple Choice
a. $10.
b. $20.
c. $30.
d. $40.