Why can Bennie's sell more hamburgers for $1 than Sally's can sell salads for the same price, and how does this affect the total revenue brought in by each restaurant?

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04-03-2024
Business

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Why can Bennie's sell more hamburgers for $1 than Sally's can sell salads for the same price, and how does this affect the total revenue brought in by each restaurant?

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krystelamaya24 krystelamaya24 · Answer 1 · 2024-03-04T07:54:47+01:00

explanation: 0.75.Whenbothrestaurantsselltheiri

1 each: 1. Bennie's can sell 2 hamburgers for

1becausetheir costperhamburgeris

0.50, allowing them to make a profit on each sale. 2. Sally's, on the other hand, can only sell 1 salad for

1becausetheir costper saladis 0.75, leaving them with a smaller profit margin compared to Bennie's.

This difference in cost and pricing strategy affects the total revenue brought in by each restaurant: - Bennie's, by selling 2 hamburgers for leach, generates a total revenue of2 from those sales. - Sally's, by selling 1 salad for 1, generatesatotalrevenueof1 from that sale.

Therefore, even though both restaurants areselling their items for the same price, Bennie's can generate more total revenue due to the lower cost of production for their hamburgers, allowing them to offer more quantity at the same price point.