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52. When their favorite restaurant charged $30 per meal (per person), Mr and Mrs Bell dined out once a week. Ceteris paribus, when the restaurant,
52. When their favorite restaurant charged $30 per meal (per person), Mr and Mrs Bell dined out once a week. Ceteris paribus, when the restaurant, as the promotional gimmick, introduced a voucher system giving patrons two meals for the price of one, Mr and Mrs Bell dined out three times a week at the restaurant. a. Calculate the couple's elasticity of demand for restaurant meals. Measure quantity demanded in terms of number of meals bought each week. [6 marks] b. What happened to their weekly expenditure on restaurant meals as the effective price per meal fell? [3 marks] Is the change in total expenditure consistent with the value of elasticity of demand you calculated? [3 marks]
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