Analysis of pricing

Assignment Help Business Economics
Reference no: EM13994468

Analysis of Pricing: You manage Mt. Claire Café which sells meals at a price of $8.50 each. The meal includes a hot dish and a beverage of your choice. The average number of meals sold per month is 21,000. The owners of Mt. Claire Café would like to increase its sales and profits. They know that if price is lowered, they will sell more meals. So they run an experiment. Price is lowered to $7.50 per meal in March and the number of meals sold increases to 23,000. a. What is the Price Elasticity of Demand? b. Is elasticity elastic, inelastic or neither? c. What does this mean and why does it matter? d. Will Revenues increase or decrease as a result of the price cut? By How much? e. Beatrice has calculated the fixed costs for the Café are $18,000 per month and each meal costs $4.50. Will profits go up or down as a result of the price cut? By How much

Reference no: EM13994468

Questions Cloud

Concepts of distance are used in international business : Various concepts of distance are used in international business. Define and explain at least five concepts of distance, and discuss how each might affect bilateral foreign direct investment (FDI) flows between countries.
Explain the concept of liability of foreignness : Explain the concept of liability of foreignness, and discuss how it might affect the balance between the costs and benefits of international diversification.
Prefers to take his automobile to a garage for a tune-up : Why might an economics professor who is good at fixing cars still prefers to take his automobile to a garage for a tune-up? If the same professor decides to get a tutor for his daughter in economics instead of tutoring her himself does the same princ..
Economists believe that markets generally are efficient : Economists believe that markets generally are “efficient.” What does this mean and why do they believe it? Use Consumer Surplus, Producer Surplus, and Total Consumer Surplus to fully answer this question.
Analysis of pricing : Analysis of Pricing: You manage Mt. Claire Café which sells meals at a price of $8.50 each. The meal includes a hot dish and a beverage of your choice. The average number of meals sold per month is 21,000. The owners of Mt. Claire Café would like to ..
Driving laws that restrict economic freedom to drink : Should we have drunk driving laws that restrict economic freedom to drink? Why or why not? Should we have seatbelt laws that restrict economic freedom? Why or why not? Your arguments should be entirely based on economic reasoning.
Environmental consciousness and sustainable practices : Conduct an online search for “green awards” to learn about the various awards programs recognizing environmental consciousness and sustainable practices. Select one that recognized a business for a sustainable marketing practice and develop a brief p..
Weaknesses of marketing research conducted online : Marketing research over the internet has increased significantly in the past decade. Outline and then discuss the strengths and weaknesses of marketing research conducted online with respect for a foreign or domestic airline company of your choice.
Deposits the full amount to her saving account : Assume that M1 is currently $2,700 and M2 is $11,000. Determine the new levels for M1 and M2 and whether the new values represent an increase decrease or unchanged totals for M1 and M2 based on each of the following INDEPENDENT scenario: In other wor..

Reviews

Write a Review

 

Business Economics Questions & Answers

  Illustrate what happens to economic output and inflation

illustrate what happens to economic output and inflation and explain why these changes take place.

  What are national savings

Suppose that GDP is $49,081, taxes are $7,478, consumption is $13,848, transfers are $5,073, and government spending is $10,880. What are national savings?

  Three generations of currency crisis models

Explain the key features of each of the the three generations of currency crisis models. Which of the three models best describes each of the financial crises discussed in this chapter? (Book-international finance and open-economy Macro economics by ..

  His strategies are strictly dominated

An item is up for auction. Player 1 values the item at 3 while player 2 values the item at 5. Each player can bid either 0,1, or 2. If player i bids more than player j then i wins the good and pays his bid, while the loser does not pay. If both playe..

  Independence referendum had passed

Suppose (contrary to fact) that the Scottish independence referendum had passed, Scotland had become independent, and you became its finance minister. Your first order of business is to recommend a currency for Scotland.

  Velocity affect the impact of the stabilization policy

Explain how the velocity of money is likely to change when the following stabilization policies are undertaken. How will this change in velocity affect the impact of the stabilization policy?

  Preferences between milk and cookies

Santa Claus has preferences between milk and cookies. Draw indifference curves to represent the following types of preferences: a) Santa likes milk and cookies, and always gets the same satisfaction from 1 ounce of milk as he does 2 ounces of cookies..

  What the current market indicates

Use the principles of supply and demand to address a predetermined goal (set by the student) in the gasoline market. Be clear on what the current market indicates and why and what your future goal is.

  Illustrate what happens to official measure of gdp

Illustrate what happens to official measure of GDP when air quality improves significantly in united states but there are no effects on aggregate production or on market prices of final goods and services.

  Comparative advantage in meatball production

Examine the first diagram showing the monthly production possibility frontier for the Tivoli and the monthly production possibility frontier for the Frivoli. Which tribe now has an absolute advantage in producing spaghetti? Which has the comparative ..

  What should be the salvage value of project at the end

If your analysis period (study period) is just three years, what should be the salvage value of project A2 at the end of year 3 to make the two alternatives economically indifferent?

  Potential danger of maintaining rigid interest rate target

Those who advocate that the Fed target monetary aggregates, usually argue that the Fed should not alter its monetary targets in response to temporary changes in macroeconomic conditions, yet those who advocate interest rate targeting never recommend ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd