Question - During the spring semester an enterprising junior decided to operate a Larry's Lemonade stand at the beach rather than work at his normal summer job. This franchise offers a single product that is available in a single size. The variable cost per cup is estimated to be $.20. The fixed costs (fees, permits, rental of concession stand, etc) are estimated to be $4000.
What is the unit cost of a cup of lemonade if he anticipates selling 5000 cups during the course of the summer?