Bon App is a French restaurant that recently increased the average price of its meals by 4%. As a result, the number of customers dropped by 3%. Based on this information, what is the price elasticity of demand for meals at Bon App? How will this 4% increase in the average price of meals impact total revenue at Bon App? (10 points) Another French restaurant in the area that competes with the Bon App decided to reduce the average price of its meals by 3%. How will this decision likely impact the demand for meals at Bon App? (5 points) Assume that the average disposable income in the area in which it operates increases by 5% over the last year. As a result, the number of customers at Bon App increased by 3%. Based on this information, what is the income elasticity of demand for meals at Bon App? Are meals at Bon App considered normal goods? (10 points)
Bon App is a French restaurant that recently increased the average price of its meals by 4%. As a result, the number of customers dropped by 3%. Based on this information, what is the price elasticity of demand for meals at Bon App? How will this 4% increase in the average price of meals impact total revenue at Bon App? (10 points) Another French restaurant in the area that competes with the Bon App decided to reduce the average price of its meals by 3%. How will this decision likely impact the demand for meals at Bon App? (5 points) Assume that the average disposable income in the area in which it operates increases by 5% over the last year. As a result, the number of customers at Bon App increased by 3%. Based on this information, what is the income elasticity of demand for meals at Bon App? Are meals at Bon App considered normal goods? (10 points)
