A friend of yours has decided to start a business selling hotdogs at the Maryland State Fair. She plans to sell hotdogs for the full week (7 days) that the State Fair is open. Your friend has thoroughly investigated her costs and discovered that it cost $400 to rent a hotdog cart, $250 for a food vendor's license, and the State Fair charges all food vendors a $500 fee. The State Fair requires that all vendors have $500,000 of liability insurance. Your friend tells you that the liability insurance will cost $450. Your friend also tells you that it will cost her $0.75 for each hot dog that she serves (including hot dogs, buns, and condiments). According to your friend, she can expect the following sales each day: Price Sales $1.00 850 $1.50 825 $2.00 800 $2.50 750 $3.00 450 Referring to the Hotdog Vendor scenario.

(a) If your friend charges $2.00 per hotdog, how many hot dogs would she have to sell to breakeven during the week?

(b) Determine the elasticity of going from a price of $1.5 to $2.00. Is it elastic or inelastic?

(c) Determine the price that will maximize profits.

(d) What is (i) the mark-up on price and (ii) the mark-up on cost at the price that will maximize profits?

(e) What is the total profit over the week at the price that maximizes profit?

****(please show work)