Estimated cost of dinner includes per person 3 course meal
Econometrics
Mehnaz has already made arrangements for her birthday celebration: she is inviting her 7 friends to a dinner party at a famous Montreal restaurant (Mehnaz will pay for everything). The estimated cost of this dinner includes $55 per person for the 3 course meal, as well as 4 bottles of wine at $120 per bottle. However, she has second thoughts now! She is thinking of inviting her friends to her house. Doing so, she needs to hire a catering company that asks for $500 flat fee for a buffet. Wine is not included. She can buy 4 bottles of wine from SAQ at $70 per bottle. Moreover, she will have to cancel reservations at the restaurant and pay a fine of $100 (for late cancelation). What is the marginal cost of her changing her decision?
