Suppose an ocean-front hotel rents rooms. In the winter, demand is: P1=50−1Q1 with marginal revenue of: MR1=50−2Q1. However, in the summer, demand is: P2=140−1Q2 with marginal revenue of:: MR2=140−2Q2. Furthermore, suppose the hotel's marginal cost of providing rooms is MC=5+1Q, which is increasing in Q due to capacity constraints. Suppose the hotel engages in peak-load pricing. During the winter, the profit-maximizing price is $______and the profit-maxizing quantity is______rooms. (Enter numeric responses rounded to two decimal places.)
Suppose an ocean-front hotel rents rooms. In the winter, demand is: P1=50−1Q1 with marginal revenue of: MR1=50−2Q1. However, in the summer, demand is: P2=140−1Q2 with marginal revenue of:: MR2=140−2Q2. Furthermore, suppose the hotel's marginal cost of providing rooms is MC=5+1Q, which is increasing in Q due to capacity constraints. Suppose the hotel engages in peak-load pricing. During the winter, the profit-maximizing price is $______and the profit-maxizing quantity is______rooms. (Enter numeric responses rounded to two decimal places.)
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter8: Cost Analysis
Section: Chapter Questions
Problem 2.2CE
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Suppose an ocean-front hotel rents rooms. In the winter, demand is:
P1=50−1Q1
with marginal revenue of:
MR1=50−2Q1.
However, in the summer, demand is:
P2=140−1Q2
with marginal revenue of::
MR2=140−2Q2.
Furthermore, suppose the hotel's marginal cost of providing rooms is
MC=5+1Q,
which is increasing in Q due to capacity constraints.Suppose the hotel engages in peak-load pricing. During the winter, the profit-maximizing price is $______and the profit-maxizing quantity is______rooms. (Enter numeric responses rounded to two decimal places.)
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