Read this article from Wall Street Journal. Practice with the 3-step analysis of changing market equilibriums that you learned from ch4. Analyze the market of restaurant meals. First identify the two events mentioned in the article, which should affect supply or demand or both on the market of restaurant meals. Draw supply-demand graph to illustrate how each event affects the market equilibrium (and how the equilibrium price and quantity change). BUSINESS Cheaper Food Puts Restaurants in a Pickle Restaurants normally benefit from lower food prices but this time is different Aug. 30, 2016 12:19 a.m. ET 10 COMMENTS Cheaper food normally helps the restaurant business by lowering its costs and lifting profit margins. But this time falling food prices are having a perverse effect by encouraging more customers to eat at home, say executives and analysts. Supermarket prices, measured by the food at home index, declined 1.6% over the last 12 months. At the same time, the food away from home index has risen 2.8%, according to the Bureau of Labor Statistics. That gap is the widest it has been since the mid-1980s, not counting the last recession. Restaurant visits began to stall in March, and overall traffic then fell in June and again in July, with fast-casual and casual dining segments posting the steepest losses, according to market researcher NPD Group Inc. The second quarter was the weakest by sales at existing restaurants since the first quarter of 2010, with three restaurant types posting declining sales in the quarterfast casual, casual dining and family diningand sales growth in every other restaurant category but pizza slowing, according to equity researcher William Blair & Co. The average check is up because restaurants are passing along higher labor costs. The average restaurant bill rose 1.7% to $7.28 in July versus a year ago, NPD said. Wendys Co. Chief Executive Todd Penegor says cheaper supermarket prices are the culprit. He recently said the gap between supermarket and restaurant prices is the biggest driver far and away of the recent softness in the restaurant industry. It has gotten a lot cheaper to get beef at your local butcher and go home and grill, he added. Julie Jargon

Read this article from Wall Street Journal. Practice with the 3-step analysis of changing market equilibriums that you learned from ch4. Analyze the market of restaurant meals. First identify the two events mentioned in the article, which should affect supply or demand or both on the market of restaurant meals. Draw supply-demand graph to illustrate how each event affects the market equilibrium (and how the equilibrium price and quantity change). BUSINESS Cheaper Food Puts Restaurants in a Pickle Restaurants normally benefit from lower food prices but this time is different Aug. 30, 2016 12:19 a.m. ET 10 COMMENTS Cheaper food normally helps the restaurant business by lowering its costs and lifting profit margins. But this time falling food prices are having a perverse effect by encouraging more customers to eat at home, say executives and analysts. Supermarket prices, measured by the food at home index, declined 1.6% over the last 12 months. At the same time, the food away from home index has risen 2.8%, according to the Bureau of Labor Statistics. That gap is the widest it has been since the mid-1980s, not counting the last recession. Restaurant visits began to stall in March, and overall traffic then fell in June and again in July, with fast-casual and casual dining segments posting the steepest losses, according to market researcher NPD Group Inc. The second quarter was the weakest by sales at existing restaurants since the first quarter of 2010, with three restaurant types posting declining sales in the quarterfast casual, casual dining and family diningand sales growth in every other restaurant category but pizza slowing, according to equity researcher William Blair & Co. The average check is up because restaurants are passing along higher labor costs. The average restaurant bill rose 1.7% to $7.28 in July versus a year ago, NPD said. Wendys Co. Chief Executive Todd Penegor says cheaper supermarket prices are the culprit. He recently said the gap between supermarket and restaurant prices is the biggest driver far and away of the recent softness in the restaurant industry. It has gotten a lot cheaper to get beef at your local butcher and go home and grill, he added. Julie Jargon