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.
Quantity Price MR MC ATC
20 $5.60 $5.20 $2.20 $2.05
40 $5.20 $4.40 $2.40 $2.10
60 $4.80 $3.60 $2.60 $2.15
80 $4.40 $2.80 $2.80 $2.20
100 $4.00 $2.00 $3.00 $2.25
120 $3.60 $1.20 $3.20 $2.30
140 $3.20 $0.40 $3.40 $2.35
160 $2.80 -$0.40 $3.60 $2.40
180 $2.40 -$1.20 $3.80 $2.45
How many ice cream cones should Peter sell in one day to maximize his profits?
a. 80
b. 100
c. 120
d. 140
What price should Peter charge to maximize his profits?
