1. A Halal food truck company (call them HG) beloved in NYC for its delicious kebabs...

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1. A Halal food truck company (call them HG) beloved in NYC for its delicious kebabs is considering franchising its food trucks along Broad Street in Philadelphia, which is five miles long. HG estimates that on a typical day there are 1,000 diners evenly spread along the street. HG further estimates that each diner will buy one kebab per day provided that the price plus any disutility cost does not exceed $5. Each person on the street incurs a disutility cost of walking to fetch a kebab at 25 cents for every X mile that person has to walk to a truck. Each kebab costs 50 cents to make and HG incurs a $40 overhead cost for each truck. HG's contracts with franchisees involve a profit-sharing arrangement and HG sets the prices that trucks charge for kebabs. a. How many franchises should HG award for the 5 mile strip? b. What will be the price for kebabs at each truck? c. Now assume that HG requires the truck holders to deliver kebabs in its territory. How many franchises should be awarded in this case, where now the distance cost of delivery is borne by the food truck owners rather than consumers? (Assume that the distance cost is still $.25 per 1/4 mile.) d. How would your answer change if the delivery cost for trucks was only half the distance cost for customers (125 cents for every % mile)? 1. A Halal food truck company (call them HG) beloved in NYC for its delicious kebabs is considering franchising its food trucks along Broad Street in Philadelphia, which is five miles long. HG estimates that on a typical day there are 1,000 diners evenly spread along the street. HG further estimates that each diner will buy one kebab per day provided that the price plus any disutility cost does not exceed $5. Each person on the street incurs a disutility cost of walking to fetch a kebab at 25 cents for every X mile that person has to walk to a truck. Each kebab costs 50 cents to make and HG incurs a $40 overhead cost for each truck. HG's contracts with franchisees involve a profit-sharing arrangement and HG sets the prices that trucks charge for kebabs. a. How many franchises should HG award for the 5 mile strip? b. What will be the price for kebabs at each truck? c. Now assume that HG requires the truck holders to deliver kebabs in its territory. How many franchises should be awarded in this case, where now the distance cost of delivery is borne by the food truck owners rather than consumers? (Assume that the distance cost is still $.25 per 1/4 mile.) d. How would your answer change if the delivery cost for trucks was only half the distance cost for customers (125 cents for every % mile)?

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Part 1 Since there is disutility at every 14th miles a person wal... View the full answer