You are the manager of a restaurant and would like to increase revenue. The host staff suggests that you should increase the pri
ce of drinks and food, but the servers suggest decreasing the price of drinks and food. You are unsure if you should increase or decrease price, but you know that a. the servers thinks demand for drinks and food is elastic.b. the servers think demand for drinks and food is inelastic.c. the host staff thinks demand for drinks and food is elastic.
Answer: a. the servers thinks demand for drinks and food is elastic.
Explanation:
Elastic demand is an economic concept that refers to the effect price has over the amount of a product consumers are willing to buy.
The law of demand affirms that the amount of purchases has an inverse relationship with the price, meaning that if prices rise, people won´t buy as much. The elasticity of demand allows us to estimate how much the purchases will decrease if the price increases, and vice-versa.
For the most part, banking created a better capital's movement within the European continents. It make it easier for the traders to make their payment and the traders also do not need to bring their payment during the transport and risk getting raided in in the middle of the process
