A person has the choice of running hot snack stall or an ice cream and cool drink shop at a certain holiday resort during the coming summer season. If the weather during the season is cool and rainy he can expect to make a profit of dollar 15,000 and if it is warm he can expect to make a profit of only dollar 3,000 by running a hot snack stall. On the other hand, if his choice is to run an ice cream and cool drink shop, he can expect to make a profit of dollar 18,000 if the weather is warm and only dollar 3,000 if the weather is cool and rainy. The meteorological authorities predict that there is 40% chance of the weather being warm during the coming season. You are to advise him as to the choice between the two types of stalls. Base clearly your argument on the expectation of the result of the two courses of action and show the result in a tabular form?

A person has the choice of running hot snack stall or an ice cream and cool drink shop at a certain holiday resort during the coming summer season. If the weather during the season is cool and rainy he can expect to make a profit of dollar 15,000 and if it is warm he can expect to make a profit of only dollar 3,000 by running a hot snack stall. On the other hand, if his choice is to run an ice cream and cool drink shop, he can expect to make a profit of dollar 18,000 if the weather is warm and only dollar 3,000 if the weather is cool and rainy. The meteorological authorities predict that there is 40% chance of the weather being warm during the coming season. You are to advise him as to the choice between the two types of stalls. Base clearly your argument on the expectation of the result of the two courses of action and show the result in a tabular form?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter10: Monopolistic Competition And Oligopoly

Section: Chapter Questions

Problem 16CTQ: Would you rather have efficiency or variety? That is, one opportunity cost of the variety of...

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