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Scenario 17-1 Peter operates an ice cream shop in the center of Fairfield. He sells several unusual flavors of organic, homemade ice cream so he
Scenario 17-1 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 following table. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.) Quantity (Units) Price (Dollars per unit) Marginal Revenue (Dollars) Marginal Cost (Dollars) Average Total Cost (Dollars per unit) 20 5.60 5.20 2.20 4.60 40 5.20 4.40 2.40 3.45 60 4.80 3.60 2.60 3.13 80 4.40 2.80 2.80 3.03 100 4.00 2.00 3.00 3.00 120 3.60 1.20 3.20 3.02 140 3.20 0.40 3.40 3.06 160 2.80 -0.40 3.60 3.11 180 2.40 -1.20 3.80 3.18 Refer to Scenario 17-1. How many double scoop ice cream cones should Peter sell per day to maximize his profit? a. 140 b. 120 c. 80 d. 100
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