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Hello Guys I Need Some Help About Economics. Here Is The Task:
6 Answers
You are the manager of a Sushi buffet restaurant. The current price for all you can eat sushi is $21++ per person during lunch period. On the entrance door there is a sign warning of no wastages of food as wastages would be charged. You have done your research as most adult would eat about 6 to 7 plates of sushi of about 2 pieces of sushi per plate. The menu price per plate is $5 per plate if ordered separately from the buffet. At the lunch period is 90 min per table.
You decide to improve the customers’ traffic into the restaurant and increase profits by having a promotion. You propose that the buffet price would not be changed but offer each patron a piping big bowl of ramen noodles for free as soon as the patrons are seated. The promotion attempts at analyzing that patrons would most likely not wait for the noodles to get cold to eat them.
In your opinion, identify and explain the economic sense that is being applied here for the sushi buffet restaurant?
Part B
In the long run, perfectly competitive firms earn zero economic profit. Then why do firms enter into an industry when they know that in the long-run they will not earn any profit?
You decide to improve the customers’ traffic into the restaurant and increase profits by having a promotion. You propose that the buffet price would not be changed but offer each patron a piping big bowl of ramen noodles for free as soon as the patrons are seated. The promotion attempts at analyzing that patrons would most likely not wait for the noodles to get cold to eat them.
In your opinion, identify and explain the economic sense that is being applied here for the sushi buffet restaurant?
Part B
In the long run, perfectly competitive firms earn zero economic profit. Then why do firms enter into an industry when they know that in the long-run they will not earn any profit?
Answers
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For Part B:
Quote:
"According to Oregon State University, economic profits and accounting profits are different. Accounting profits are the total revenue minus the total costs. Economic profits are total revenue minus implicit and explicit costs. These include opportunity costs, which are costs a business gives up that are not in the budget, such as a salary from another business in lieu of self-employment. Just because a business has zero economic profits does not mean that the business is not turning an accounting profit. In fact, a firm that produces zero economic profits produces an accounting profit, all else being equal."
Source:
https:/
Quote:
"According to Oregon State University, economic profits and accounting profits are different. Accounting profits are the total revenue minus the total costs. Economic profits are total revenue minus implicit and explicit costs. These include opportunity costs, which are costs a business gives up that are not in the budget, such as a salary from another business in lieu of self-employment. Just because a business has zero economic profits does not mean that the business is not turning an accounting profit. In fact, a firm that produces zero economic profits produces an accounting profit, all else being equal."
Source:
https:/
I'm not sure I understand the first part. Is the idea that customers would eat the noodles straight away and this would take the edge of their appetite so they may take fewer sushi courses? Or is the idea that people will choose their sushi quickly so they can eat it with warm noodles? The sentence "The promotion attempts at analyzing that patrons would most likely not wait for the noodles to get cold to eat them. " is confusing me as it doesn't seem clear to me what it means
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