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

question 1

Multiple Choice

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

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Definitions:

Maturity Value

The amount that will be received at the end of a bond or other debt instrument's term.

Face Value

The nominal or dollar value printed on a security or currency, representing its legal value.

Note Receivable

A written promise for amounts to be received by a business, typically including interest.

Allowance Method

An accounting technique used to account for bad debts, where an estimated amount is deducted from accounts receivable to reflect possible non-collection.