Le Crueset is a French restaurant that recently increased the average price of its meals by 4%. As a result, the number of customers dropped by 3%. Based on this information, what is the price elasticity of demand for meals at Le Crueset? How will this 4% increase of the average price of meals impact total revenue at Le Crueset?
Another French restaurant in the area that competes with Le Crueset decided to reduce the average price of its meals by 3%. How will this decision likely impact the demand for meals at Le Crueset?
Assume that the average disposable in the area in which operates increases by 5% over the last year. As a result, the number of customers at Le Crueset increased by 3%. Based on this information, what is the income elasticity of demand for meals at Le Crueset? Are meals at Le Crueset considered normal goods?