Final answer:
To calculate Peter's maximum daily profit, we apply monopolistic competition principles to identify the profit-maximizing output and price point, where marginal revenue equals marginal cost. Using data examples, we compute total revenue and subtract total costs to find profits. However, the exact daily profit figure for Peter cannot be determined without additional information.
Step-by-step explanation:
To determine how much profit Peter will earn each day if he chooses the price and quantity that maximize his profit, we need to examine the data provided in relation to monopolistic competition and profit maximization. According to the given information, when the profit-maximizing output level is determined at a quantity of 5, the profits are $40. Furthermore, we have specifics about a situation where choosing a quantity of 40 and a price of $16 is optimal for maximizing profits under monopolistic competition. Drawing from these examples, we calculate total revenue by multiplying the price by the quantity sold, and subtracting total cost, which is the quantity sold times the average cost.
From the illustration provided, we have the monopoly pricing at a quantity of 5 and a price of $800, yielding total revenue of $4000 (5 x $800). The total cost at this quantity and price is $1650 (5 x $330), resulting in a profit of $2350 ($4000 - $1650). Therefore, if Peter wants to maximize his profits, he needs to find a similar point where his marginal revenue equals his marginal cost, and then calculate his total revenue minus total cost to arrive at his maximum profit. Given the options, the answer is not explicitly stated in the provided information, but the principles outlined would guide Peter to the correct decision.