Ideally the Bcouple would generate a higher check and this would afford the restaurant an even higher revpash.
Thus achieving a favorable balance between seat inventory and average check size remains the challenge of revenue management.
A follow-up point reflects on the role of fixed costs which decline on a unit basis as output increases.
In the restaurant case and especially in urban environments rent a key fixed-cost item can account for a high percentage of total expenses.
Any revenue generated at off-hours can thus make a contribution to profitabilty provided that those sales cover the marginal (extra) costs associated with the extended hours of operation because the fixed cost in this case rent will be incurred whether the restaurant is open or closed
The only additional expenses from staying open longer will involve having to pay additional staff wages which tend to be low a tiny increment to utility expenses and the cost of the food and drinks consumed.
Assuming that the additional or marginal revenue exceeds the additional or marginal expense of staying open a profit from the main operation will be enhanced or a loss will be lessened by the extent of the difference