Question

aco Loco Taco Loco is considering a new addition to their menu. They have test marketed a number of possibilities and narrowed them down to three new products, X, Y, and Z. Each of these products is made from a different combination of beef, beans, and cheese, and each product has a price point. Taco Loco feels they can sell an X for $17, a Y for $13, and a Z for $14.

Answer 1

Taco Loco is considering adding new products to their menu and is analyzing different combinations of ingredients and their price points. The process is similar to other food service businesses that evaluate product offerings and set competitive prices, such as a hoagie priced at $3.99 with various options.

Step-by-step explanation:

Taco Loco is weighing the decision to introduce a new product to their menu. The consideration involves evaluating options X, Y, and Z, which are differentiated by their ingredients including beef, beans, and cheese, in addition to their respective price points of $17, $13, and $14. This scenario is analogous to menu planning and pricing strategies within the food service industry, where businesses analyze product offerings and set prices based on factors such as ingredient costs, consumer demand, and competitive positioning. For instance, a hoagie at another establishment is priced at $3.99 and comes with a variety of options including Deluxe Ham, Turkey Breast, and Three Cheese, providing insight into how diverse menu items might be priced within the market.