Suppose there are 1,000 potential customers spread evenly along a 10 kilometre straight road and each potential customer will buy one pizza per day from a monopolist provided that the price plus any disutility cost does not exceed $10, where disutility cost of travel is $1 for every kilometre. Each pizza costs $6 to make and there is a $70 overhead cost per day to operate the shop. What is the maximum profit per day?

Suppose there are 1,000 potential customers spread evenly along a 10 kilometre straight road and each potential customer will buy one pizza per day from a monopolist provided that the price plus any disutility cost does not exceed $10, where disutility cost of travel is $1 for every kilometre. Each pizza costs $6 to make and there is a $70 overhead cost per day to operate the shop. What is the maximum profit per day?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter5: Supply, Demand, And Price: Applications

Section: Chapter Questions

Problem 8QP

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