1. You operate a lemonade stand located outside of an office building. Your costs are as follows:

Rent paid to building owner $25 per week

Lemons $25 per bag of 100 lemons.

Sugar $5 per box of 100 sugar packets

Cups $50 per bag of 100 cups

Each cup of lemonade uses one lemon and one sugar packet. Your normal selling prince is $1.50 per cup.

1. It is one minute before closing time and there is nobody else in sight. You are about to pack up when Frank stops by and says that all 25 people in his office would like a cup of lemonade and offers you $22 for the whole bunch. This is a ONE TIME offer. You have never seen Frank before and you never will again. Do you accept this offer or not, and WHY?

2. What if there was a long line of customers waiting at the lemonade stand enough customers to use all the lemons that you have. Does this make any difference? NOW would you sell to Frank at $22? WHY or WHY NOT?