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Analysis of Pricing: You manage MBA Deli which sells meals at a price of $6 each. The average number of meals sold per month is 7,000. MBA Deli would like to increase its sales and profits. The MBAs running the Deli, know that if price is lowered, they will sell more meals. So they run an experiment. Price is lowered to $5 per meal in October and the number of meals sold increases to 8,000.
Bill says that if they raised price to $7 per meal, they would be willing to produce 10,000 meals
How many meals will MBA Deli sell at $7 each? Use the original the elasticity of demand calculated in 1 above.(original elasticity was, -0.8571429)
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