Donna Mia's is currently selling their dinner specials for $15.00 each. The restaurant is thinking about increasing that price by $3.00. They hired an economist to figure out how that would affect total revenue which is currently one hundred and fifty-six thousand dollars a month. The economist estimated that total revenue would fall by about 4.5percent. I A. What is the price elasticity of demand over the relevant range? B. How many dinners will be sold at the new price? C. Explain why this would/would not be a good idea. You must use the elasticity coefficient (explain what the number means), total revenue, and what and what you know about price elasticity of demand to support your answer.

Donna Mia's is currently selling their dinner specials for $15.00 each. The restaurant is thinking about increasing that price by $3.00. They hired an economist to figure out how that would affect total revenue which is currently one hundred and fifty-six thousand dollars a month. The economist estimated that total revenue would fall by about 4.5percent. I A. What is the price elasticity of demand over the relevant range? B. How many dinners will be sold at the new price? C. Explain why this would/would not be a good idea. You must use the elasticity coefficient (explain what the number means), total revenue, and what and what you know about price elasticity of demand to support your answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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