Maximize Profits
A trendy French restaurant is one of the first businesses to open in a small corner of a commercial building still under construction. The restaurant has received rave reviews and has lines of diners waiting for tables most nights.
a. In the short run (next few months), what measures should the restaurant take to maximize its profits? Explain.
b. In the long run (next six months and beyond), how can it maximize its profits? (Assume that the impressive state of demand is permanent).
We'd want to maximize profits in the long run with a permanently high state of demand.