Which of the following hypothetical restaurants would be most affected by the decrease in demand due to COVID-19? A cafe that already has a large patio seating section. A pizzeria that already employs delivery drivers. A cheap hamburger restaurant with a functioning drive-thru. A fancy restaurant that has a large profit margin due to the fame of its chef. A tavern that attracts customers by offering live music and energetic dancing.

A new restaurant - Uovo - has just opened in West L.A. It is serving the upscale market, with truly outstanding pasta that is flown in overnight from Bologna, Italy. Uovo offers a fixed-price menu with an appetizer, three dishes of pasta, and a delicious tiramisu for dessert. The restaurant faces the following demand function: Q = 500 - 4P where Q is the number of guests per day. The marginal cost is constant at $45 per customer (including expenses for ingredients and personnel). The restaurant is paying a rent of $1,000 per day. What is the profit-maximizing number of guests that Uovo should serve each day, and what price should Uovo charge to maximize profit? What is the elasticity of demand at the optimal price and quantity? Is demand elastic or inelastic at this point? From what we learned in class, make sense for the restaurant to operate in this area of the demand curve (elastic/inelastic part)? 3 4. What is the profit of the restaurant at the optimal price and quantity, and what…

A new restaurant – Uovo – has just opened in West L.A. It is serving the upscale market, with truly outstanding pasta that is flown in overnight from Bologna, Italy. Uovo offers a fixed-price menu with appetizer, three dishes of pasta, and a delicious tiramisu for dessert. The restaurant faces the following demand function: Q = 600 - 4P where Q is the number of guests per day. The marginal cost is constant at $50 per customer (including expenses for ingredients and personnel). The restaurant is paying a rent of $2,000 per day. What is the profit-maximizing number of guests that Uovo should serve each day, and what price should Uovo charge to maximize profit? What is the elasticity of demand at the optimal price and quantity? Is demand elastic or inelastic at this point? From what we learned in class, does it make sense for the restaurant to operate in this area of the demand curve (elastic/inelastic part)? What is the profit of the restaurant at the optimal price and quantity, and what…

The inverse demand curve facing a resort hotel is during the low season and PL = 100-Q₁ PH = 350 – QH during the high season. The resort's marginal cost is $50 per night in cleaning costs for the room and general maintenance and administration. The resort only has 75 rooms. What is the resort's profit- maximizing peak-load pricing strategy? Illustrate the solution in a diagram. 1.) Using the point drawing tool, indicate the profit-maximizing price during the low season. Label this point 'e' 2.) Using the point drawing tool, indicate the profit-maximizing price during the high season. Label this point 'eH Carefully follow the instructions above, and only draw the required objects. p. $ per night 69 400- 350- 300- 250- 200- a 150- 100- 50- 0- 0 MR D MRH 50 100 150 200 250 300 Q, Rooms per night MG DH 350 400 Q ON

Help me please

A fried chicken franchise finds that the demand equation for its new roast chicken product, "Roasted Rooster," is given by 40 p0.6 where p is the price (in dollars) per quarter-chicken serving and q is the number of quarter-chicken servings that can be sold per hour at this price. Find E(p) E(p) = q= X Find the price elasticity of demand when the price is set at $3.70 per serving. At a price of $3.70, a 1% increase in price leads to a Interpret the result. At a price of $3.70, the demand is elastic They should raise X% decrease in demand. ✓X the price per serving in order to increase revenue.

Noticing that profits on college text books are very high, the Beast Book Store (BBS), with the help of a venture capitalist, has gone into text book publishing. In its current production range its average total cost is approximately equal to its marginal cost which it estimates to be about $25. It has estimated that price elasticity of demand for its books at current price levels to be about -1.5. The manager of BBS uses mark-up pricing to price the books that it sells using a 150% mark-up (even with this mark-up BBS can still underprice most other book publishers). Assuming that BBS wants to maximize short-term profits on its book sales and initially enjoys a monopoly in the local college textbook production market, is this a good pricing procedure? Harvard and other local colleges soon start publishing companies of their own increasing competition and causing the price elasticity of demand for BBS books to increase to -2.0. Assuming that BBS’s demand curve that generates this -2.0…

Your firm is considering entering a new territory. From market research, you have obtained the following demand function that explains how your price (P in dollars) and advertising (A in thousands of dollars) choices influence the quantity demanded (Q in thousands of units). Q = 20 - 6P + 2A To enter the new market you plan on running $10,000 worth of ads. The marginal cost of producing your product is $1 per unit. 3a) What is your profit maximizing price, quantity sold, and profit?

Jabari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Jabari initially produced five trucks, but then decided to increase production to six trucks. The following graph gives the demand curve faced by Jabari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Jabari must lower the price from $160,000 to $120,000 per truck. Notice that Jabari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial five engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial five engines by selling at $120,000 rather than $160,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $120,000. PRICE (Thousands of dollars per fire engine) 220 200 180 160 140 120 100 80 60 40 20 Jabari 0 0 1 2 3…

GameZone, a video games store, is considering the best way to price two new games – a first-person shooter (FPS) and a racing game. There are four types of consumers that might buy the games with roughly equal numbers of each type, and their willingness to pay (WTP) for each game is detailed in the table below (assume that the willingness-to-pay for a second game of the same type is zero). How should Gamezone price the two games separately to maximise revenue? How should Gamezone price a bundle of both games to maximise revenue? Is there an alternative (involving bundling) that generates more revenue than either single prices or a bundle alone? Under what condition/s is bundling likely to increase profits for a firm?   Consumer Type WTP for FPS game WTP for racing game A $120 $70 B $70 $120 C $160 $10 D $10 $160