Question: The Economics Club at UAH is thinking about opening a pizza-by-the-slice parlor in the lobby of the Business Building to raise money for their club. They would be open from 10:30 AM - 1:30 PM, Monday through Friday. They have done their homework and have calculated a daily cost function and they have estimated a daily market demand function for pizza. Costs are

TC = 50 – 0.6Q + 0.015Q²

The estimated market demand function is

Q = 42.5 – 50 P + 2.5 NC + 5 P_U

where:

P - price of a pizza slice

NC - number of middle-of-the-day classes in the building (average is 52 per day)

P_U - price of pizza sold in the student union. The current price of a slice in the union is $1.50.

If they decide to open this shop, what price should they charge for pizza and what is their expected daily profit? (20 pts.)