Two Buns Burger Joint Is Weighing Three Capacity Expansion Alternatives

question 5

Short Answer

Two Buns burger joint is weighing three capacity expansion alternatives: small, medium, and large shops. Whatever capacity choice is made, the market conditions for the burgers can be described as "moderate" or "strong." The probability of a moderate market situation is estimated to be 40 percent; and a strong market situation has a probability of 60 percent. The payoffs are as follows.
$$\begin{array} { | l | c | c | } \hline & \text { Moderate Market Conditions } & \text { Strong Market Conditions } \\\hline \text { Small shop } & \$ 25,000 & \$ 50,000 \\\hline \text { Medium shop } & \$ 20,000 & \$ 70,000 \\\hline \text { Large shop } & - \$ 5,000 & \$ 90,000 \\\hline\end{array}$$ Which capacity choice should the company make?

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Definitions:

White South

Refers to the Southern states of the U.S and their culture, politics, and society, predominantly shaped by white Americans, especially during and after the period of slavery.

Corruption

Dishonest or fraudulent conduct by those in power, typically involving bribery or the abuse of power for personal gain.

Radical Reconstruction

The period after the American Civil War during which the federal government took direct control over the former Confederate states to enforce the rights of formerly enslaved people.

Railroad Construction

The process of building the infrastructure necessary for train travel, including tracks, stations, and bridges.