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There is a cafe (Bubble Business Cafe). They have been thriving now. In fact, the business has been so successful by selling bubble tea to
There is a cafe (Bubble Business Cafe). They have been thriving now. In fact, the business has been so successful by selling bubble tea to all the boba-addicts on campus at a university that the Bubble Business Caf can no longer satisfy all the demand. The Bubble Business Caf has brainstormed three ways it can expand its business during the summer before all the students return to school in September: open a second location on campus, hire more people to make more bubble tea, or upgrade the machines to make bubble tea more quickly. However, the success of these options will depend on whether school tuition will increase for September or remain the same. If school tuition increases, upgrading the machines will have a profit of $1m; opening a second location will cause the Bubble Business Caf to lose $5m, because the demand for bubble tea will stagnate; or, more students will be looking for part-time jobs to pay for their tuition that the Bubble Business Caf will be able to hire more staff at lower wages, yielding a profit of $3m. If school tuition remains the same, upgrading the machines will allow the Bubble Business Caf to serve more customers and earn a profit of $4m; the second location will attract so many new customers that it will earn a profit of $7m; or, all the students will be so busy consuming bubble tea that the Bubble Business Caf will have invest all its newly-earned revenue on increasing wages to incentivize students to apply for the jobs (so profit is ultimate $0m). The university's School of Business announced that there is a 25% chance that tuition will increase in September.
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