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Law Incorporation [45]

3 years ago

13

_______ refers to the practice of reducing all or most prices on the menu in the belief that total guests will increase to the p

oint that total sales revenue also increases.

1 answer:

nasty-shy [4]3 years ago

8 0

Answer:

Explanation:

Value pricing

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Use the midpoint method to calculate the price elasticity of demand for potato chips that increased in price from $2.00 to $3.00

fiasKO [112]

Answer:

$e_p$ ≅ -1.7.

Explanation:

Let's calculate the change in quantity:

$\frac{Q_2 - Q_1}{\frac{Q_2+Q_1}{2} } = \frac{50-100}{\frac{50+100}{2} } = (approx.) -0.67.$

Let's now calculate the change in price:

$\frac{P_2 - QP_1}{\frac{P_2+P_1}{2} } = \frac{3.00-2.00}{\frac{3.00+2.00}{2} } = 0.40.$

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