current revenue:
80 scoops @ $0.90 = $72.00
proposed revenue:
98 scoops @ $0.80 = $78.40
clearly the profit goes up by $6.40
Michael Reeves, an ice cream vendor, pays $17.50 for a five-gallon container of premium ice cream. From this quantity he sells 80 scoops at $0.90 per scoop. If he sold smaller scoops, he could sell 98 scoops from the same container; however, he could charge only $0.80 per scoop. If Michael switches to the smaller scoops, by how much will his profit per container go up or down?
1 answer
1 answer