Products, Services and Prices for King Taco, Inc

Products, Services and Prices in the Free Market Economy Board members, chief operating officers or business owners have to decide when to decrease or increase prices in rescript to maximize profits. Price snapshot depends on the responses of consumers and producers to price varietys. The law of demand tells us that consumers go forth buy more of a product when its price declines and little when its price increases. The responsiveness (or sensitivity) of consumers to a price change is calculated by a products price elasticity of demand. For some(a) products ?for example, restaurant meals- consumers are highly responsive to price changes. (McConnell & Brue, 2004, p.356.). might taco Restaurant, Inc was founded in 1974. King Taco Restaurants, Inc. is a bowed stringed instrument of fast food Mexican restaurants throughout Los Angeles County. King Taco began its operations from a converted ice cream truck since then has expanded to 16 popular locations and has been ranked in the top 100 of Hispanic Business by the Hispanic Business Magazine.

When a restaurant change the prices in a specific dish give care the Mexican taco, customers may distinguish other dishes from the menu or even find other restaurant but if the customer is loyal or like the way the restaurant cook the dish (seasoning, flavor, species), the response to the change in price could be different. King Taco Restaurants, Inc. sells over 240,000 tacos a week at $ 0.95 cents a taco and on a lower floor the new management, executives are considering maximizing profits minimum by 15% since they assume that are dealing with a utterly inelastic demand for the taco dish but their engross is how much price they have to increase in order to achieve their goal. They hired a representative of University of Phoenix stinting team MBA501 to help them decide and the outcome was as follows: presume that the total quantity of tacos consumed per week was 240,000 pieces, total fix cost was $111,640 which included rents, payroll, insurance and equipment, total variable cost was... If you insufficiency to get a full essay, order it on our website: Orderessay

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