Joe Laramie Owns and Operates Joe's Burgers, a Small Fast

question 209

Essay

Joe Laramie owns and operates Joe's Burgers, a small fast food store, located at the edge of City College campus in Newton, Ohio. After several very profitable years, Joe's Burgers began to have problems. Most of the problems were related to Joe's expansion of the eating area in the restaurant without corresponding increases in the food preparation area. Joe does not have the cash or financial backing to expand further. He has therefore decided to sell his business.
William Sheets is interested in purchasing the business. However, he is located in another city and is unfamiliar with Newton. He has asked Joe why he is selling Joe's Burgers. Joe replies that his elderly mother requires extra care, and that his brother needs help in his manufacturing business. Both are true, but neither is his primary reason for selling. Joe reasons that William should not have asked him anyway, since profitable businesses don't come up for sale.
Required:
1. Identify the stakeholders in this situation.
2. Did Joe act ethically in not revealing fully his reasons for selling the business? Why or why not?

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Definitions:

Marginal Utility

The additional satisfaction or utility gained from consuming one more unit of a good or service, which typically decreases with each additional unit consumed.

Total Utility

The total satisfaction or benefit received by consuming a specific quantity of a good or service.

Units of Utility

A measure of satisfaction or pleasure that a consumer receives from consuming a product or service.

Utility

In economics, a measure of satisfaction or happiness that a consumer derives from the consumption of goods and services.