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Type of food: British pub food Price range: Most meals on the mains section of the menu cost between PS10 and PS12, a small chicken parmesan is PS8.95 and there is a slightly more expensive grill menu.
* Virgiliu Midrigan, New York University and NBER, and Oleksly Kryvtsov, Bank of Canada, "Inventories, Markups and Real Rigidities in Menu Cost Models" (NBER Working Paper No.
It is, at least, all reasonably priced - two/three courses from the 'bistro' menu cost pounds 37/pounds 42, which includes the entrance fee of about pounds 15 (although more formal menus are offered on major racedays for upwards of pounds 50).
Examples of menu cost pricing for various menu suggestions are illustrated to help the operator set consumer selling prices while taking into account the desired gross profit margin.
Consider a dynamic menu-cost model in which there is positive steady-state inflation; firms can change prices costlessly every second period, but, if firms want to change prices in between the two periods, they must pay the menu cost. This gives rise to an asymmetric pricing rule in which "inaction" is optimal for a wider range of negative shocks than positive shocks.
Each of the firms chooses to incur a menu cost (print a new catalog) twice per year.
The standard objection to the menu cost explanation of infrequent price adjustment is that these costs are much too small to explain observed pricing behavior.
Before the menu cost model can be taken seriously, it must tackle the obvious objection that in practice administrative costs of price and wage adjustment are very small.
Price range: Starters on the main menu cost around PS4 with sharing plates at around PS8.