A large restaurant chain sells hamburgers and French fries as separate products.

There are 2 million consumers across all of the restaurant’s locations. Of those, 1 million consumers value hamburgers at $5 and French fries at $1, while the other 1 million value hamburgers at $3 and French fries at $3.

The restaurant is considering three pricing strategies:

1. Sell hamburgers for $5 and French fries for $3.

2. Sell hamburgers for $4 and French fries for $2

3. Sell hamburgers and French fries as one product combined for $6.

Calculate the restaurant’s profit under each strategy. Which of these pricing strategies should the restaurant adopt to maximize its profits?

Answer rating: 100% (QA)

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