What percentage must the owner change the price of big macs

Assignment Help Business Economics

Reference no: EM13854003

A specific McDonald’s franchise owner is looking at elasticities of Big Macs. E(p)= 2 (Price), E(i)=1 (Income), E(mt)=1.5 (m=Big Mac, t= Taco). The franchise owner would like to increase the price of Big Macs by 6%. The owner read an economic report saying incomes will grow by 4% next year and due to a strong marketing campaign by Taco Bell, the price of Tacos will fall by 2%.

If the franchise owner currently sells 1,200 Big Macs a day, how many Big Macs a day can the owner expect to sell?

If the owner wants to keep units sold the same at 1,200 per day, by what percentage must the owner change the price of Big Macs?

Reference no: EM13854003

Questions Cloud

The demand for commodity is elastic : If the demand for a commodity is elastic, an increase in the price of the commodity. Assume the cross price elasticity of demand for products A and B is positive. Then, the products must be

What is marginal cost and profit maximizing quantity : Mr Patel runs a motel in Tampa, FL. The market is highly competitive since there are many hotels in the surrounding areas and the average room rent per night is $35. There are 30 rooms are Mr Patels motel and each room can be rented for 30 nights a m..

Describes would promote economic growth : The great 18th century economist Adam Smith wrote, "Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought abo..

Discuss behavioural implications of participative budgeting : Discuss the behavioural implications of participative budgeting. Demonstrate an understanding of the behavioural implications for planning and control when an organisation uses an imposed budgetary approach.

What percentage must the owner change the price of big macs : A specific McDonald’s franchise owner is looking at elasticities of Big Macs. E(p)= 2 (Price), E(i)=1 (Income), E(mt)=1.5 (m=Big Mac, t= Taco). The franchise owner would like to increase the price of Big Macs by 6%. If the owner wants to keep units s..

Negative announcements on routine matters : You company, PolicyPlan Insurance Services, is a 120-employee insurance claims processor based in Milwaukee. PolicyPlan has engaged Midwest Sparkleen for interior and exterior cleaning for the past five years, Midwest Sparkleen did exemplary work ..

What is the marginal product-total product for each month : The Green City Hospital treated 100 patients in May with 20 nursing hour inputs, and it treated 120 patients in June with 22 nursing hour inputs. What is the total product for each month? What is the marginal product?

What is the price elasticity of demand of a firm : What is the marginal revenue of a firm that sells a product at the price of $15 and the price elasticity of demand for the product is -2? What is the price elasticity of demand of a firm that sells a product for $20 and marginal revenue is $12?

Calculate the standard deviation : Calculate the variance of x=(6, 8, 10 ) BY HAND, showing all the necessary calculations. Calculate the variance of x=( 1, 4, 2, 5 ) BY HAND, showing all the necessary calculations. Calculate the standard deviation of x=( 1, 4, 2, 5 ) BY HAND, showing..

User Account

All Pages