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Q1. The owners of a successful restaurant want a loan for $50,000 to renovate the kitchen and expand the dining room. They expect that the extra tables will add between $2,000 and $5,000 to the restaurant's monthly revenue. The bank is willing to let the business have an intermediate-term loan of $50,000 for five years at an interest rate of 6.5 percent. Calculate the monthly payment and explain whether taking this loan is a smart business decision.
Q2. If you were a manager in a tobacco company, analyze the elasticity of demand for tobacco products. Evaluate the factors involved in making decisions about pricing tobacco products indicating which would be the most influential.
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