Difficulty: Easy
Correct Answer: Both (A) and (R) are true, and (R) is the correct explanation of (A).
Explanation:
Introduction / Context:
This problem checks understanding of demand drivers in consumer markets. Restaurant footfall responds to price, quality, location, service speed, ambiance, and word-of-mouth. The claim is that consistently low pricing explains consistently high occupancy.
Given Data / Assumptions:
Concept / Approach:
Price elasticity of demand suggests that lowering price (ceteris paribus) increases quantity demanded. If capacity is limited, persistent excess demand can manifest as “always full.” We must test the truth of A and R and whether R causally explains A.
Step-by-Step Solution:
1) R is plausible and taken as true in the stem.2) A states an observed outcome: full capacity utilization.3) Link: Low prices reduce the customer’s cost, attracting larger crowds; if the restaurant faces capacity constraints and steady inflow, occupancy remains at or near 100%. Hence R explains A.
Verification / Alternative check:
Queueing and yield-management logic: sustained low pricing + adequate quality + good location can create daily peak queues, consistent with “always full.”
Why Other Options Are Wrong:
(b) denies the causal channel; (c)/(d) contradict the premises; “None” adds no value.
Common Pitfalls:
Assuming price is the only factor. While not the sole driver, it can suffice to explain full capacity if the other basics are satisfactory.
Final Answer:
Both A and R are true, and R correctly explains A.
Discussion & Comments