Arabica beans undoubtedly make the best coffee. However, coffee houses sometimes blend their coffee a bit, adding some Robusta beans which are cheaper but not as tasty. All customers know that Arabica beans are better, and so like their coffee with as much Arabica as possible. And yet, their customers aren’t coffee connoisseurs, and so they’re not very good at distinguishing small changes in the blend. If the difference between two blends is less than 50g of a 500g bag, then customers simply can’t tell the difference. Each day, one coffee house called Java Covfefe House presents its customers with two of its three blends. Blend A has in 10g of Robusta beans; Blend B has in 40g of Robusta beans, and Blend C has in 70g of Robusta beans. Java Covfefe House doesn’t say how much Robusta is in each blend, but they allow the customers to taste it before they buy it. Now assume that x ≻ y means that customers definitely pick x over y, x ⪰ y means customers either prefer x to y or they can’t tell the difference between the two, and x ∼ y means the customers can’t tell the difference between x and y. Use this information to examine the preferences of Java’s customers. Then construct the best business strategy for Jave Covfefe House and discuss the broader implications for the coffee market.
Arabica beans undoubtedly make the best coffee. However, coffee houses sometimes blend their coffee a bit, adding some Robusta beans which are cheaper but not as tasty. All customers know that Arabica beans are better, and so like their coffee with as much Arabica as possible. And yet, their customers aren’t coffee connoisseurs, and so they’re not very good at distinguishing small changes in the blend. If the difference between two blends is less than 50g of a 500g bag, then customers simply can’t tell the difference. Each day, one coffee house called Java Covfefe House presents its customers with two of its three blends. Blend A has in 10g of Robusta beans; Blend B has in 40g of Robusta beans, and Blend C has in 70g of Robusta beans. Java Covfefe House doesn’t say how much Robusta is in each blend, but they allow the customers to taste it before they buy it. Now assume that x ≻ y means that customers definitely pick x over y, x ⪰ y means customers either prefer x to y or they can’t tell the difference between the two, and x ∼ y means the customers can’t tell the difference between x and y. Use this information to examine the preferences of Java’s customers. Then construct the best business strategy for Jave Covfefe House and discuss the broader implications for the coffee market.
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