Question
Crepe Creations (CC) is considering franchising its unique brand of crepes to stall-holders on Hermoza Beach, which is four miles long. CC estimates that, on
Crepe Creations (CC) is considering franchising its unique brand of crepes to stall-holders on Hermoza Beach, which is four miles long. CC estimates that, on an average day, there are 1,000 sunbathers evenly spread along the beach and each sunbather will buy one crepe per day provided that the price plus any disutility cost does not exceed $5. Each sunbather incurs a disutility cost of getting up from resting to get a crepe and returning to their beach spot of 25 cents for every mile the sunbather has to walk to get to the CC stall. Each crepe costs $0.50 to make and CC incurs a $40 overhead cost per day to operate a stall.
What will be the price of a crepe at each stall?
4.75
4.1
4.5
4.9
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