Multiple Choice
A restaurant manager has estimated that the price elasticity of demand for meals is 2. If the restaurant increases menu prices by 5%, she can expect the number of meals sold to decrease by _____ and total revenue to _____.
A) 10%; increase
B) 5%; stay constant
C) 10%; fall
D) 2.5%; fall
Correct Answer:
Verified
Correct Answer:
Verified
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