Final answer:
The correct option is everyday low.
The restaurant is using an everyday low pricing strategy to set its menu prices just below its competitors without offering weekly specials. This approach minimizes the menu costs and is aligned with theories by Keynesian economists on price stickiness and adjusting costs.
Step-by-step explanation:
The pricing method being described in the question is everyday low pricing. This strategy involves setting prices lower than competitors, but not heavily discounting products on a weekly special or promotional basis. The intent behind everyday low pricing is to attract customers seeking consistent, low prices without the need to track sales or discounts, thereby reducing the menu costs associated with frequent price changes. Menu costs include resources expended on analyzing market demand, updating sales material, and revising pricing information, which can be significant. Additionally, frequent price changes can confuse or upset customers, making price stability appealing.
The selection of a specific price point by a firm, as discussed in the given reference material, is the culmination of understanding the production costs at the margin (ingredients, equipment, rent, wages), and the desired profit. These two components form the basis of the firm's pricing strategy, as everyday low pricing sets prices just below competitors to offer customers perceived constant savings. This strategy can indeed be a response to the economic forces described by Keynesian economists, where prices are sticky and adjusting them frequently is not optimal due to the aforementioned costs.