An owner of a farm is thinking of expanding her operation to including rabbits for meat production. With her current operation, her wealth is $75,000 (with a utility of wealth equal to 274). If she adds rabbits, she knows there us a 60% chance of low prices, in which case her wealth falls to $67,000 (with a utility wealth of 260). She also knows there is a 40% chance of high prices, in which her wealth rises to $90,000 (with a utility wealth of 300).
a) by how much would the probability of the low price state of nature have to change to make the farmer indifferent btwn adding and not adding?

Question

An owner of a farm is thinking of expanding her operation to including rabbits for meat production. With her current operation, her wealth is $75,000 (with a utility of wealth equal to 274). If she adds rabbits, she knows there us a 60% chance of low prices, in which case her wealth falls to $67,000 (with a utility wealth of 260). She also knows there is a 40% chance of high prices, in which her wealth rises to $90,000 (with a utility wealth of 300).
a) by how much would the probability of the low price state of nature have to change to make the farmer indifferent btwn adding and not adding?