Refer to Scenario 9

question 142

Multiple Choice

Refer to Scenario 9.5 below to answer the question(s) that follow.
SCENARIO 9.5: Investors put up $520,000 to construct a building and purchase all equipment for a new restaurant. The investors expect to earn a minimum return of 10 percent on their investment. The restaurant is open 52 weeks per year and serves 900 meals per week. The fixed costs are spread over the 52 weeks (i.e. prorated weekly) . Included in the fixed costs is the 10% return to the investors and $1,000 per week in other fixed costs. Variable costs include $1,000 in weekly wages and $600 per week for materials, electricity, etc. The restaurant charges $3 on average per meal.
-Refer to Scenario 9.5. The restaurant's weekly economic profit is

Definitions:

Demand Curve

A graph showing the relationship between the price of a good and the amount of it that consumers are willing to purchase at each price point.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at those prices.

Increase in Demand

describes a situation where there is a higher quantity of a product or service desired by consumers at a given price level.

Inferior Good

A type of good for which demand decreases as the income of individuals increases, inversely related to income levels.