1) Last week, your cafe sold 3,000 cups of coffee. Demand is expected to decrease by 10% for every 5% increase in price. Your current price is $2.80 and you are considering raising your price to $3.00. What is the percent price increase? What do you expect demand to be after the price increase if nothing else changes?

2) If one well-trained server, or barista, is able to make and serve 20 cups of coffee per hour and works a 4-hour shift, how many servers would be needed for the following scenarios:

How many servers would need to be working to process 100 cups per hour during rush hour?

How many cups of coffee would a server be able to process in a single shift?

How many servers would be necessary for an 8-hour day where 720 cups of coffee are served?

3) In your first week operating the cafe, you only expect sales of 290 medium cups of coffee daily, Monday through Friday. You plan to sell the specialty coffee for $3.50 each. You also know that variable costs (coffee, cups, milk, etc.) average $0.70 per cup, and weekly fixed expenses (rent, wages, etc.) are $5,600.

What will be your revenues (dollar sales) for one week?

What is your dollar margin for a cup of coffee?

What are your total costs for the week?

What is your total cash flow for the week presuming all expenses are paid as they occur?