Mt Clair Cafe Sheet Answers
Understanding the Effects of Pricing on Revenues, Costs and Pricing
Please copy this page to your computer (I am also including a link to the document here if you would rather access it through the link.
After copying the sheet to your computer, then write your brief answers in the slots provided. You are expected to answer Question 1 through 3 with one or two word answers. Your answers to Questions 4 and 5 should also be very brief. Any calculations must be shown at the end of this answer sheet and not in the answer slots.
Post your completed sheet to Assignments, NOT to the Discussion Conference. Then post your comment on the main ideas that you learned from this exercise in the Discussion Conference for Week 1 in the thread provided.
Mt Claire Cafe Case
Introduction: Introduction: It is February and you have recently been hired as the manager of Mt. Claire Café. You have been asked to improve profitability.
Analysis of Pricing: You manage Mt. Claire Café which sells meals at a price of $8.50 each. The meal includes a hot dish and a beverage of your choice. The average number of meals sold per month is 21,000. The owners of Mt. Claire Café would like to increase its sales and profits. They know that if price is lowered, they will sell more meals. So they run an experiment. Price is lowered to $7.50 per meal in March and the number of meals sold increases to 23,000.
Question 1: Mt Claire Café Case
Question 2
a) What would be the Price Elasticity of Demand if Shaun is correct?
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