Assume marginal cost is $40 in the summer and also in the winter. The daily demand for hotel rooms is given by p = 140 – q in summer and p = 100 – q in winter. There are only 40 rooms in the hotel. Which statement is true? A. The deadweight loss is positive in winter but zero in summer. B. The profit-maximizing price in summer = $90. C. The profit-maximizing price in winter = $60. D. The deadweight loss in both seasons are equal.
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Assume marginal cost is $40 in the summer and also in the winter. The daily demand for hotel rooms is given by p = 140 – q in summer and p = 100 – q in winter. There are only 40 rooms in the hotel. Which statement is true?
A. The
B. The profit-maximizing
C. The profit-maximizing price in winter = $60.
D. The deadweight loss in both seasons are equal.
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