(Answered) : Saudi Entrepreneur Must Decide Size Drive Coffee Stand Construct Manager Narrowed Choice L Q35962301

A Saudi entrepreneur must decide on the size of a drive-throughcoffee stand to construct. The manager has narrowed the choice downto large or small. If he builds large and experiences low demand heanticipates the following:

1. $200 (daily profit) if he does nothing,
2. $225 (daily profit) if he lowers the prices,
3. $175 (daily profit) if he hires street performers to attractattention

If he builds small and experiences high demand he anticipatesthe following:

1. could do nothing ($175 profit per day),
2. stay open longer hours (profit of $225/day),
3. improve processes ($250/day profit),
4. or raise prices ($200/day profit).

Building large for high demand has an expected payoff of$250/day and building small for