Starting a gluten free and nut free restaurant has been a lifelong dream of Sydney Quintero, since he realized his dietary restrictions as a teenager. Now, that Sydney has graduated with his business degree, he is pursuing his dream. He has researched geographic locations around his state and selected three different cities, Fort Alden, Central City and Roseville, as possibilities for his flagship restaurant. The market for gluten/nut free products often changes due to health awareness, current trends and general demographic changes in population. Sydney’s marketing research has given him some estimates for the different locations as described in the decision table below.
Starting a gluten free and nut free restaurant has been a lifelong dream of Sydney Quintero, since he realized his dietary restrictions as a teenager. Now, that Sydney has graduated with his business degree, he is pursuing his dream. He has researched geographic locations around his state and selected three different cities, Fort Alden, Central City and Roseville, as possibilities for his flagship restaurant. The market for gluten/nut free products often changes due to health awareness, current trends and general demographic changes in population. Sydney’s marketing research has given him some estimates for the different locations as described in the decision table below.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Starting a gluten free and nut free restaurant has been a lifelong dream of Sydney Quintero, since he realized his dietary restrictions as a teenager. Now, that Sydney has graduated with his business degree, he is pursuing his dream. He has researched geographic locations around his state and selected three different cities, Fort Alden, Central City and Roseville, as possibilities for his flagship restaurant. The market for gluten/nut free products often changes due to health awareness, current trends and general demographic changes in population. Sydney’s marketing research has given him some estimates for the different locations as described in the decision table below.
Decision Table
Decision Table
| State of Nature | |||
|---|---|---|---|
| Alternatives | Strong Market | Fair Market | Poor Market |
| Fort Alden | 75,00075,000 | 49,50049,500 | 35,00035,000 |
| Central City | 70,00070,000 | 54,00054,000 | 29,00029,000 |
| Roseville | 115,000115,000 | 80,00080,000 | 40,00040,000 |
Step 2 of 2 :
What would Sydney’s anticipated payoff be for the maximax strategy?
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