Discussion Post: Restaurant Reopening
The objective of this discussion post is to help you understand the concept of elasticity of demand.
You own one of several popular restaurants in your area. Because of the Covid Pandemic, all restaurants were forced to close down for two months but can now open to the public. Labor costs went away but overhead (rent, electricity, etc.) was still a large percentage of your total costs so you are short on funds. What options should you consider?
Should you raise menu prices to make up the lost revenue? Should you lower menu prices to attract more customers? If you raise prices and customer count falls is there some way you can make up the revenue shortfall? If you lower menu prices and revenue falls is there some way you can increase your business revenue?
Explain your reasoning in terms of demand and elasticity in a well-written narrative including an introduction to the topic.
The response must include a reference list. Using one-inch margins, double-space, Times New Roman 12 pnt font and APA style of writing and citations.