Assume that the cost of producing ice cream is $1.20 per gallon. You estimate that you can sell 1,000 gallons per month.
If you want to earn revenue of $2,500 per month, what price should you charge for a gallon of ice cream?
If you earn revenue of $2,500 per month, what will your monthly profit be?
Assume that your estimates were too aggressive and that you will only be able to sell 800 gallons per month at a market price of $2 per gallon. What will be your monthly profit (or loss)?