Ruben's sells fish tacos and other lunchtime food near university campuses. Currently, the price of a Bottom Feeder Taco is $1.40 and daily sales at the YSU campus store is 55 tacos. A price increase to $1.80 reduces daily sales to 45 tacos.
What is the effect of the price increase on revenue at the YSU campus store?
Calculate the price elasticity of demand for Bottom Feeder Tacos using the mid-point formula.
Another Ruben's store is located on the ZSU campus. The students/customers from ZSU are nearly identical to those from YSU, but their income is 15% higher. When Bottom Feeder Tacos are priced at $1.80, daily sales at the ZSU store are 51 tacos. Are Bottom Feeder Tacos a normal good? Calculate the income elasticity of demand for Bottom Feeder Tacos using the mid-point formula.