1. PRESENTATION
Group members:
 Nguyễn Đức Hoàng ID: 1106090026
 Trịnh Lan Hương ID: 1106090032
 Lê Vinh Thanh ID: 1106090063
 Phạm Hải Yến ID: 1106090088

4. 4. The elasticity of our product:
Because of the increase of number of people eating fast foods and
people care more about their health, the demand of our product will
be elastic.
As a new product in Vietnam and a limited side of restaurant, we
cannot serve as much as the increase of demand, so the supply will
be inelastic.
Price Total Elasticity of
Demands Supplies
(VND) revenue demand
25,000 3800 2200 $55,000,000
35,000 3400 2400 $84,000,000 0.26 inelastic
50,000 3200 2600 $130,000,000 0.14 inelastic
55,000 2800 2800 $154,000,000 1.25 elastic
60,000 2400 2850 $144,000,000 1.57 elastic
70,000 2000 2900 $140,000,000 1.00 Unitary or unit
For a month

5. At the price equals 55,000VND
 Price elasticity of Demand: ED= [(2800
– 3200)/3200]: [(55 – 50)/50] = 1.25
=> Elastic Demand
 Price elasticity of Supply: ES = [(2800
– 2600)/2600]: [(55 – 50)/50] = 0.77
=> Inelastic Supply

6. 5. The pricing stategy basing on elasticity
Quantit
Quantity Total
Price y
Demande revenue Elasticity
(VND) Supplie
d (VND)
d
25,000 3800 2200 55,000,000
35,000 3400 2400 84,000,000 Inelastic
130,000,00 Inelastic
50,000 3200 2600
0
154,000,00 Elastic
55,000 2800 2800
0
144,000,00 Elastic
60,000 2400 2850
0
140,000,00 Elastic
70,000 2000 2900
0

7. In the price range 55,000 to 60,000 VND,
the demand is elastic
 the relationship between price & Total
Revenue is indirect (P  TR )
 Do not increase price

8. 6. The different costs
a. Fixed costs
Rent expense 15,000,000 VND
Depreciation expense –
furniture 410,000 VND
– fridge 330,000 VND
– baking oven 375,000 VND
– kitchen 415,000 VND
equipment 280,000 VND
– uniforms 250,000 VND
– decoration
Building service expenses 6,500,000 VND
Salary expenses 32,000,000 VND
Total fixed costs:
Advertising expense 49,310,000
250,000 VND
VND

9. b. Variable costs
Raw Total variable
Water Electricity
material costs
0 0 0 0 0
800 240,000 3,062,360 30,000,000 33,302,360
1,200 360,000 3,802,178 32,000,000 36,162,178
1,600 480,000 4,566,252 34,000,000 39,046,252
2,000 600,000 5,354,583 36,000,000 41,954,583
2,400 720,000 7,906,987 38,000,000 46,626,987
11,701,38
2,800 62,541,382
840,000 2 50,000,000
14,117,67
3,200 81,067,675
950,000 5 66,000,000
19,315,19
3,600 102,745,196
1,430,000 6 82,000,000

11. 120000
100000
80000 AFC
AVC
60000 ATC
MC
40000
20000
0
0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000
Three F's Cost Curves

12. 7. Our business production decisions at
different price levels:
Case 1: if P>ATC=40,000 which make profit for our company so our company
should continue to operate.
Case 2: if P=ATC=40,000, our company should not go on operating because
the profit in this case equal zero.
Case 3: if AVC=20,000<P<ATC= 40,000 making profit that is less than zero so
this case make loss for our company which makes us continue to operate in
short-run.
Case 4: if P=AVC=20,000, our company should continue to operate in short-
run.
Case 5: if P<AVC=20,000 that makes loss in all of variable cost and a part of
fix cost so our decision is closing the company.