Part 2 (9 questions at 3 points each for 27 points total)
Pretend that you have a lemonade stand and that the demand for lemonade in your neighborhood is estimated to be: Q = 80 - 200 P
Just like in the lecture, you get all the materials to make the lemonade for free so we assume that the costs of production are zero. Your goal, your objective, is to maximize profits which is the same as maximizing total revenue given the zero cost assumption. HINT: set up an excel spreadsheet with columns for Price, Quantity, and Total Revenue. Have the price column change in 5 cent increments (as was done in the lecture).
The profit (revenue) maximizing price is ______ cents. (don't use a decimal point in this answer!)
Hello Dear, Let's do this together! The... View the full answer