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Greg's Grill plans a promotional discount on steak dinners for a month, reducing the price from $20.00 to $18.00. Advertising expenses amount to $2500. Greg
Greg's Grill plans a promotional discount on steak dinners for a month, reducing the price from $20.00 to $18.00. Advertising expenses amount to $2500. Greg expects steak dinner sales to increase by 20%, but expects a 10% decline in chicken dinner sales. Weekly data are:
- Steak Dinners: Sales Price: $20.00, Variable Costs: $10.00, Sales Volume: 300
- Chicken Dinners: Sales Price: $15.00, Variable Costs: $7.50, Sales Volume: 400
Requirement: Determine the impact on sales and profitability and recommend whether Greg should proceed.
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