Scenario 16-3
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 table below. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.)
-Refer to Scenario 16-3. What price should Peter charge per double scoop ice cream cone to maximize his profit?
A)$5.60
B)$4.40
C)$3.20
D)$2.40

Question

Scenario 16-3
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 table below. (Everyone who purchases Peter's ice cream buys a double scoop cone because it's so delicious.) 
-Refer to Scenario 16-3. What price should Peter charge per double scoop ice cream cone to maximize his profit?
A)$5.60 
B)$4.40 
C)$3.20 
D)$2.40

Quizplus · Accepted Answer

To maximize profit, Peter should charge the price where marginal cost equals marginal revenue. Assuming the scenario provides this information, $4.40 is likely the price where this condition is met.

Scenario 16-3 Peter Operates an Ice Cream Shop in the Center of Center