A Local Restaurant Has Estimated That the Price Elasticity of Demand

question 82

Multiple Choice

A local restaurant has estimated that the price elasticity of demand for meals is equal to 2.If the restaurant increases menu prices by 5%, they can expect the number of customers to decrease by ________and total revenue to _.

• A)10%; increase
• B)5%; stay constant
• C)10%; fall
• D)2.5%; fall

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