What price maximizes profits

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You are considering selling your house. Your reservation value is $100,000. Your real-estate agent tells you that there is a 0.4 chance a random buyer will pay $150,000, a 0.25 chance the buyer will pay $200,000, a 0.1 chance the buyer will pay $250,000, and a 0.25 chance it will not sell. If you must commit to a posted price, what price maximizes profits?

Reference no: EM131387675

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