Question: Need help with this problem, don't understand set up confused 2. (Lemonade stand) Suppose you open a lemonade stand on the side of the street.
Need help with this problem, don't understand set up confused

2. (Lemonade stand) Suppose you open a lemonade stand on the side of the street. Potential buyers drive by according to a Poisson process {Nth>0 with rate 1. The ith buyer is willing to pay up to Xi for a lemonade, Where {Xk }k>1 are i.i.d. uniform [0, 1] random variables, but you are only allowed to display one price and if the buyer does not like it they will just drive past. Suppose it costs you c = 0.2 to produce one lemonade. (a) Suppose you can run the lemonade stand all day, that is, for the interval [0,24]. What price p should you charge to maximize prot? (b) Suppose you only have enough lemon juice to sell 5 lemonades in a day. What price p should you charge to maximize prot
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