Maria Lorenzi owns an ice cream stand that she operates during the summer months in West...
Maria Lorenzi owns an ice cream stand that she operates during the summer months in West Yellowstone, Montana. She is unsure how to price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The number of people who entered the store was roughly the same each week. During the first week, she priced the cones at $6.00 and 2,515 cones were sold. During the second week, she priced the cones at $6.50 and 2,050 cones were sold. The variable cost of a cone is $1.60 and consists solely of the costs of the ice cream and the cone itself. The fixed expenses of the ice cream stand are $2,060 per week.
Required:
1. What profit did Maria earn during the first week when her price was $6.00?
2. At the start of the second week, Maria increased her selling price by what percentage? What percentage did unit sales decrease? (Round your percentage answers to 2 decimal place.)
3. What profit did Maria earn during the second week when her price was $6.50? (CORRECT ANSWER IS 7985)
4. What was Maria's increase (decrease) in profits from the first week to the second week?
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Maria Lorenzi owns an ice cream stand that she operates during
the summer months in West...
Maria Lorenzi owns an ice cream stand that she operates during the summer months in West...
Maria Lorenzi owns an ice cream stand that she operates during the summer months in West Yellowstone, Montana. She is unsure how to price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The number of people who entered the store was roughly the same each week. During the first week, she priced the cones at $3.60 and 1,855 cones were sold. During the second week, she priced the cones at...
Lickety Split sells ice cream cones in a variety of flavours. The following are data for a recent week: Revenue (1,00...
Lickety Split sells ice cream cones in a variety of flavours.
The following are data for a recent week:
Revenue (1,000
cones at $1.75 each)
$1,750
Cost of
ingredients
$640
Rent
500
Store
attendant
600
1,740
Pretax income
$10
The manager estimates that if she were to increase the price of
cones from $1.75 to $1.93 each, weekly volume would be cut to 850
cones due to competition from other nearby ice cream shops.
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Maria Lorenzi owns an ice cream stand that she operates during the summer months in West Yellowstone, Montana. She is unsure how to price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The number of people who entered the store was roughly the same each week. During the first week, she priced the cones at $3.60 and 1,855 cones were sold. During the second week, she priced the cones at...
Lickety Split sells ice cream cones in a variety of flavours.
The following are data for a recent week:
Revenue (1,000
cones at $1.75 each)
$1,750
Cost of
ingredients
$640
Rent
500
Store
attendant
600
1,740
Pretax income
$10
The manager estimates that if she were to increase the price of
cones from $1.75 to $1.93 each, weekly volume would be cut to 850
cones due to competition from other nearby ice cream shops.
Estimate the profit-maximizing price per cone....
The Vaughn House sells ice cream cones in a variety of flavours. Data for a recent week appear here: Revenue (900 cones at $1.51 each) $1,359 Cost of ingredients 513 Rent 288 Store attendant 495 Income $ 63 The Vaughn House's manager received a call from a university student club, requesting a bid on 100 cones to be picked up in three days. The cones could be produced in advance by the store attendant during slack periods and then stored...
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