A large restaurant chain sells hamburgers and French fries as separate products. There are 2 million consumers across all of the restaurant's locations. Of those, 1 million consumers value hamburgers at $5 and French fries at $1, while the other 1 million value hamburgers at $3 and French fries at $3. The restaurant is considering three pricing strategies: Sell hamburgers for $5 and French fries for $3. Sell hamburgers for $4 and French fries for $2 Sell hamburgers and French fries as one product combined for $6. Calculate the restaurant's profit under each strategy. Which of these pricing strategies should the restaurant adopt to maximize its profits?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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A large restaurant chain sells hamburgers and
French fries as separate products.
There are 2 million consumers across all of the
restaurant's locations. Of those, 1 million
consumers value hamburgers at $5 and
French fries at $1, while the other 1 million
value hamburgers at $3 and French fries at $3.
The restaurant is considering three pricing
strategies:
Sell hamburgers for $5 and French fries for $3.
Sell hamburgers for $4 and French fries for $2
Sell hamburgers and French fries as one
product combined for $6.
Calculate the restaurant's profit under each
strategy. Which of these pricing strategies
should the restaurant adopt to maximize its
profits?
Transcribed Image Text:A large restaurant chain sells hamburgers and French fries as separate products. There are 2 million consumers across all of the restaurant's locations. Of those, 1 million consumers value hamburgers at $5 and French fries at $1, while the other 1 million value hamburgers at $3 and French fries at $3. The restaurant is considering three pricing strategies: Sell hamburgers for $5 and French fries for $3. Sell hamburgers for $4 and French fries for $2 Sell hamburgers and French fries as one product combined for $6. Calculate the restaurant's profit under each strategy. Which of these pricing strategies should the restaurant adopt to maximize its profits?
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