Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Maria Lorenzi owns an ice cream stand that she operates during the summer months in West Yellowstone, Montana. She is unsure how to price her

Maria Lorenzi owns an ice cream stand that she operates during the summer months in West Yellowstone, Montana. She is unsure how to price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The number of people who entered the store was roughly the same each week. During the first week, she priced the cones at $4.00 and 1,965 cones were sold. During the second week, she priced the cones at $4.50 and 1,550 cones were sold. The variable cost of a cone is $.60 and consists solely of the costs of the ice cream and the cone itself. The fixed expenses of the ice cream stand are $2,010 per week. Required: 1. What profit did Maria earn during the first week when her price was $4.00? 2. At the start of the second week, Mara increased her selling price by what percentage? What percentage did unit sales decrease? (Round your percentage answers to 2 decimal place.) 3. What profit did Maria earn during the second week when her price was $4.50? 4. What was Maria's Increase (decrease) in profits from the first week to the second week? 1. Profit 2. Percentage increase in selling price 2. Percentage decrease in unit sales 3. Profit 4

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions