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. How much profit will Peter earn each day if he chooses the price and quantity that maximize his profit?
A)$176
B)$208
C)$225
D)$352

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. How much profit will Peter earn each day if he chooses the price and quantity that maximize his profit?
A)$176 
B)$208 
C)$225 
D)$352

Quizplus · Accepted Answer

Peter will earn $176 each day if he chooses the price and quantity that maximize his profit. This is because the profit-maximizing price is $8, and the profit-maximizing quantity is 22 units. At this price and quantity, Peter's total revenue will be $176, and his total cost will be $0.

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