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Suppose the demand for Big Macs at McDonald's restaurants in the United States has a price elasticity of demand of 0.6. Based on simple economic
Suppose the demand for Big Macs at McDonald's restaurants in the United States has a price elasticity of demand of 0.6. Based on simple economic theory, will the company's revenues increase if Big Mac prices were raised? Would your pricing recommendation change if you learned the cross-price elasticity of demand for large soft drinks with respect to Big Mac prices is -1.8 and the cross-price elasticity of demand for large French fries with respect to Big Mac prices is -2.4? Explain clearly.
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