The Owner of Tastee Cookies Needs to Decide Whether to Lease

question 73

Multiple Choice

The owner of Tastee Cookies needs to decide whether to lease a small, medium, or large new retail outlet. She estimates that monthly profits will vary with demand for her cookies as follows: $\begin{array}{|l|l|l|l|}\hline\text {SIZE}\\\text {OF}&\text {DEMAND}\\\hline \text { OUTLET } & \text { LOW } && \text { HIGH } \\\hline \text { Small } & \$ 1,000 && 1,000 \\\hline \text { Medium } & 500 && 2,500 \\\hline \text { Large } & 0 && 3,000 \\\hline\end{array}$ If she uses the maximax criterion, what size outlet will she decide to lease?

• A) small
• B) medium
• C) large
• D) either small or medium
• E) either medium or large

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Definitions:

Poverty Threshold

The minimum level of income deemed necessary to achieve an adequate standard of living in a given country.

Social Insurance

Government-provided insurance programs designed to protect individuals from economic risks and insecurities, such as unemployment, old age, or disability.

Food Stamps

A government assistance program that provides low-income families with funds to purchase groceries, aiming to reduce hunger and improve nutrition.

Housing Subsidies

Financial assistance provided by the government or other organizations to help individuals or families afford housing.