Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You own a small restaurant specializing in pizza and craft beer. An analysis of the weekly demand for pizzas has revealed the following demand relation:
You own a small restaurant specializing in pizza and craft beer. An analysis of the weekly demand for pizzas has revealed the following demand relation: 0=101.6-3.2P +4.8M +1.2P. where O is quantity of pizzas per week, P is price (S) of a pizza, M per capita average monthly household income in $1,000 ($5,000 = $5). a. Determine the ordinary and inverse demand curves facing your firm if PG= $5.20 and M= $4,200. b. At what quantity would your total revenues from sales be maximized? What price would you need to charge if your goal were to maximize your sales revenues? c. Now suppose that due to the pandemic, the government decides to send each household a stimulus check for the next several months and the result is per capita average monthly
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started