Consider the following data for Brenda's and Cole's - two restaurants: Brenda's Cole's Annual Fixed Cost $600,000
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Question:
Consider the following data for Brenda's and Cole's - two restaurants:
Brenda's | Cole's | |
Annual Fixed Cost | $600,000 | $100,000 |
Variable Cost per Customer | $5 | $10 |
Revenue per Customer | $15 | $15 |
Annual number of customers | 100,000 | 100,000 |
(a) What is Brenda's percentage increase in profit for one percent increase in number of customers served?
(b) What is Brenda's percentage increase in profit for one percent decrease in cost?
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