polyas urn

Food for Less (FFL), a grocery store, is considering offering one hour photo developing in their store. The firm expects that sales from the new one hour machine will be $150,000 per year. FFL currently offers overnight film processing with annual sales of $100,000. While many of the one hour photo sales will be to new customers, FFL estimates that 60% of their current overnight photo customers will switch and use the one hour service. Suppose that 60% of FFL's current overnight photo customers, half would start taking their film to a competitor that offers one hour photo pocessing if FFL fails to offer the one hour service. What is the level of