Answered: Peter operates an ice cream shop in the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he has a monopoly over his own ice cream, though he competes with many other firms selling ice cream in Fairfield for the same customers. Peter’s demand and cost values for sales per day are given in the table below. (Everyone who purchases Peter’s ice cream buys a double scoop cone because it’s so delicious.)

3. Refer to Narrative 16-1. How many ice cream cones should Peter sell in one day to maximize his profits?

4. Refer to Narrative 16-1. What price should Peter charge to maximize his profits?

5. Refer to Narrative 16-1. When Peter maximizes his profits, how much revenue does he earn per day?

Quantity
20
Price
MR
MC
АТС
$5.60
$5.20
$4.80
$4.40
$4.00
$3.60
$3.20
$2.80
$2.40
$5.20
$4.40
$3.60
$2.80
$2.00
$1.20
$0.40
-$0.40
-$1.20
$2.20
$2.40
$2.05
$2.10
$2.15
$2.20
$2.25
$2.30
$2.35
$2.40
$2.45
40
$2.60
$2.80
$3.00
$3.20
$3.40
$3.60
$3.80
60
80
100
120
140
160
180

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