Question

Sushi Palace is the new sushi bar in the neighborhood. Their estimated marginal cost is 10 cents per sushi unit. Sushi Palace estimates that each consumer has a demand for sushi given by q=20-10p, where q is sushi units and p is price in dollars per unit.

(a) Determine the optimal price per sushi unit.

Answer 1

The optimal price per sushi unit for Sushi Palace is $1.99.

Step-by-step explanation:

To determine the optimal price per sushi unit for Sushi Palace, we need to find the price at which their marginal cost equals the demand for sushi. Since the marginal cost is given as 10 cents per sushi unit, we can set it equal to the demand equation of q=20-10p. Solving for p:

marginal cost = demand

0.10 = 20 - 10p

10p = 20 - 0.10

p = (20 - 0.10) / 10

p = 19.90 / 10

p = 1.99

Therefore, the optimal price per sushi unit for Sushi Palace is $1.99.