You own a property on Main Street on which a small, vacant take-out pizza stand sits. There
Question:
You own a property on Main Street on which a small, vacant take-out pizza stand sits.
There are other vacant take-out pizza stands in the same locale (i.e. Main Street) as well as on the less busy Side Street locale. From your market analysis, you are confident that the sites will attract the following number of pizza sales each month (based on their locale):
Main Street: 450
Side Street: 300
The market price for pizzas in the city is $7.00. You know the cost of running and maintaining a pizza stand (paid by the operator of the business of course) is fixed at $900 per month.
Jobs in another industry which pay $200.00 per month are plentiful in the city and there fore $200.00 is the minimum profit after rent operators must achievein order for them to run a pizza stand. What is a potential operator's monthly profit, before rent, at each of the two locales (Main Street and Side Street)?
Expert Answer:
To calculate the potential operators monthly profit before rent at each of the two locales Mai... View the full answer
