Scenario 16-4
Peter Operates an Ice Cream Shop in the Center

question 151

Short Answer

Scenario 16-4
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.)
$\begin{array}{|l|l|l|l|l|}\hline \text { Quantity } & \text { Price } & \text { MR } & \text { MC } & \text { ATC } \\\hline 20 & \$ 5.60 & \$ 5.20 & \$ 2.20 & \$ 2.05 \\\hline 40 & \$ 5.20 & \$ 4.40 & \$ 2.40 & \$ 2.10 \\\hline 60 & \$ 4.80 & \$ 3.60 & \$ 2.60 & \$ 2.15 \\\hline 80 & \$ 4.40 & \$ 2.80 & \$ 2.80 & \$ 2.20 \\\hline 100 & \$ 4.00 & \$ 2.00 & \$ 3.00 & \$ 2.25 \\\hline 120 & \$ 3.60 & \$ 1.20 & \$ 3.20 & \$ 2.30 \\\hline 140 & \$ 3.20 & \$ 0.40 & \$ 3.40 & \$ 2.35 \\\hline 160 & \$ 2.80 & -\$ 0.40 & \$ 3.60 & \$ 2.40 \\\hline 180 & \$ 2.40 & -\$ 1.20 & \$ 3.80 & \$ 2.45 \\\hline\end{array}$

-Refer to Scenario 16-4. What price should Peter charge to maximize his profits?

Recognize the efficacy and limitations of private tort actions in environmental protection.

Identify the evolution of responsibility for air pollution control between states and the federal government.

Comprehend the legal principles governing nuisance suits and liability in environmental law.

Grasp the concepts of public and private nuisances and the criteria for legal actions against them.

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Definitions:

Commercial Banks

Financial institutions that accept deposits, offer various loans, and provide other financial services to the public.

Open Market Operations

Central bank activities involving the buying or selling of government securities to control the money supply and interest rates.

Discount Rate

The interest rate set by central banks that is charged to commercial banks for loans, influencing monetary policy and the money supply.

Severe Recession

An unusually deep and prolonged downturn in economic activity that exceeds the standard definition of a recession, often marked by significant declines in GDP and employment.