?Three students want to open an ice cream business next summer.Max thinks that demand will be high and they should purchase alarge stand and acquire premium ice cream equipment. Minnie feelsthat demand will be low and that they should purchase a tarp andsome basic hand tools to make the ice cream. Midsy is pretty surethat demand will fall in-between these two extremes, so they canget by with a shack and a used ice cream machine. You are theirbusiness consultant and estimated the following costs, revenues,and probabilities of each level of demand in the table shown below.What is the expected profit for this venture?
Demand | Total Revenue | Total Expenses | Probability |
Low | $300 | $50 | .3 |
Medium | $1,200 | $500 | .3 |
High | $5,000 | $850 | .4 |
