Your new restaurant business, A Bear in the Woods, just scored a big win. You got...

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Your new restaurant business, A Bear in the Woods, just scored a big win. You got the only restaurant storefront available in a new development in beautiful Woods Landing, WY. The development includes a small university, a public K-12 school, a startup incubator, numerous office buildings, for-sale condos (ranging from $100K to $2.5MM in price), rental apartments (from very affordable to families to really expensive), retail establishments, movie theatre, a basic gym, and a high-end gym (complete with indoor pools, basketball courts, and all the other equipment necessary to attract workout enthusiasts who are paying $150 per month for membership). The nearest restaurants and grocery stores are at least a 45- minute drive away (and that's without traffic). You've estimated demand to be Q = 10 0.2P meals (on average, per minute). Based on your previous experience running a restaurant (which you successfully sold for a $1.1MM profit), you expect your marginal cost to be MC = 10Q. What should you charge and how much profit do you make? Illustrate and explain. Your new restaurant business, A Bear in the Woods, just scored a big win. You got the only restaurant storefront available in a new development in beautiful Woods Landing, WY. The development includes a small university, a public K-12 school, a startup incubator, numerous office buildings, for-sale condos (ranging from $100K to $2.5MM in price), rental apartments (from very affordable to families to really expensive), retail establishments, movie theatre, a basic gym, and a high-end gym (complete with indoor pools, basketball courts, and all the other equipment necessary to attract workout enthusiasts who are paying $150 per month for membership). The nearest restaurants and grocery stores are at least a 45- minute drive away (and that's without traffic). You've estimated demand to be Q = 10 0.2P meals (on average, per minute). Based on your previous experience running a restaurant (which you successfully sold for a $1.1MM profit), you expect your marginal cost to be MC = 10Q. What should you charge and how much profit do you make? Illustrate and explain.

Answer rating: 100% (QA)

To determine the optimal pricing strategy for A Bear in the Woods restaurant and calculate the resul... View the full answer