Question

Dolly’s Backyard BBQ is the only BBQ restaurant in town. Her profit maximizing price is $10 and serves 50 customers per day. At this quantity, her average total cost is $7 per customer. How much profit does Dolly earn per day?

Answer 1

Calculations are as follows:

Price of the barbecue= $10

Customers served in a day= 50

Sales = 50 * $10= $500

Expenses or total cost per customer = $7

So with 50 customers, the cost is $7 * 50 = $350

Net Profit = Sales - Expenses/Costs

$500 - $350 = $150 Net Profit Per Day with 50 customers daily

Answer 2

The profit per day is $3.00. Since the maximum price is $10 and its cost is $7 per day, the profit of $3 is what Dolly earns every day. If she has 50 customers per day, she will earn $150 per day. Without any other costs incurred, the profit every day is $3 or $150 if she has 50 customers every day.