There are only a few restaurants near a tourist attraction. These restaurants would mail discount coupons to local residents nearby and they find that this could help them earning more profits. Explain the economic principle behind this.

There are only a few restaurants near a tourist attraction. These restaurants would mail discount coupons to local residents nearby and they find that this could help them earning more profits. Explain the economic principle behind this.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 9PA

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Question

There are only a few restaurants near a tourist attraction. These restaurants would mail
discount coupons to local residents nearby and they find that this could help them earning
more profits. Explain the economic principle behind this.

Expert Solution

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Discount coupons helps to increase revenue of the businesses.

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