A restaurant wants to see whether its revenues and profits are increasing in real terms. The values of the Consumer Price Index as of the end of each month, together with the monthly revenues and costs of the restaurant are given in the Table below.

Index

Revenue

Cost

Jan.

2,192

253,800

103,800

Feb

2,413

257,905

120,900

Mar

2,618

275,000

138,900

Apr

3,477

277,900

177,300

May

3,789

282,000

185,000

Jun

3,861

295,000

187,700

Jul

3,895

301,750

192,100

Aug

4,001

295,600

199,500

Calculate the monthly rate of inflation if the index reflects the general price level in the economy. Convert the historic revenues and costs to current revenues and costs using the index. Comment on the trend of real revenues and costs during the six months analyzed and discuss the implications of this trend on profit margin.