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Welcome back, class. Last we left off, we were discussing the shortcomings of a cost-plusapproach to menu pricing and teasing more sophisticated strategies that have the potential to benefit operators in myriad ways. Now we are back to contextualize our case for more modern strategies through a hypothetical restaurant that we decided to name Millie’s. Think of Millie’s as a fast-casual concept, a sort of hybrid of leading fast-casual and quick-service chains like Five Guys, Wingstop, and Panera Bread. It is located on the north side of Chicago in a neighborhood with a median income of $50,000.In order to keep the takeaways straightforward and the insights clear, we are going to focus on a few menu items that we think of as variations on standard inclusions across the aforementioned segments and avoid discussing all other specific elements of the restaurant. Those menu items are as follows:
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