The inverse demand curve facing a resort hotel is400-PL= 100 - QL350-during the low season and300-PH = 350 - QH250-during the high season. The resort's marginal cost is $50 per night incleaning costs for the room and general maintenance and administration.The resort only has 75 rooms. What is the resort's profit-maximizingpeak-load pricing strategy? Illustrate the solution in a diagram.200-%242 150-1.) Using the point drawing tool, indicate the profit-maximizing price duringthe low season. Label this point 'e .'100-50-MC2.) Using the point drawing tool, indicate the profit-maximizing price duringthe high season. Label this point 'ey.'MR DMR50100150200250300350400Carefully follow the instructions above, and only draw the required objects.Q, Rooms per night.....p, $ per night

The peak load pricing strategy is being used by a monopolist. They tend to produce at the point…

The inverse demand curve facing a resort hotel is 400- PL = 100 - QL 350- during the low season and 300- PH = 350 - QH 250- during the high season. The resort's marginal cost is $50 per night in cleaning costs for the room and general maintenance and administration. The resort only has 75 rooms. What is the resort's profit-maximizing peak-load pricing strategy? Illustrate the solution in a diagram. 200- 2 150- 1.) Using the point drawing tool, indicate the profit-maximizing price during the low season. Label this point 'e.' 100- 50- MC 2.) Using the point drawing tool, indicate the profit-maximizing price during the high season. Label this point 'ey. MRH 150 200 250 300 Q, Rooms per night MR D 0- 50 100 350 400 Carefully follow the instructions above, and only draw the required objects. **** p, $ per night

The inverse demand curve facing a resort hotel is 400- PL = 100 - QL 350- during the low season and 300- PH = 350 - QH 250- during the high season. The resort's marginal cost is $50 per night in cleaning costs for the room and general maintenance and administration. The resort only has 75 rooms. What is the resort's profit-maximizing peak-load pricing strategy? Illustrate the solution in a diagram. 200- 2 150- 1.) Using the point drawing tool, indicate the profit-maximizing price during the low season. Label this point 'e.' 100- 50- MC 2.) Using the point drawing tool, indicate the profit-maximizing price during the high season. Label this point 'ey. MRH 150 200 250 300 Q, Rooms per night MR D 0- 50 100 350 400 Carefully follow the instructions above, and only draw the required objects. **** p, $ per night

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter14: Indirect Price Discrimination

Section: Chapter Questions

Problem 7MC

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A botanical garden estimates a demand for visits per month as Q = 16 - 2P, where P is the entry fee per visit and Q is monthly visits in 1,000s. There is constant marginal cost of admitting another person to the botanical garden as MC = 2. Mangers currently charge price of P = 5 to enter, resulting in Q = 6 visits (i.e., 6,000 visits per month). The managers are considering a new pricing strategy where they require visitors to pay a flat fee to join a membership to the gardens but then lower the price per visit. a. What price should be charged per visit to the botanical gardens? b. How visits are there at this price? c. What is the maximum amount that visitors would be willing to pay for memberships? Explain.
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Annual demand and supply for the Entronics company is given by: QD = 5,000 + 0.5 I + 0.2 A - 100P, and QS = -5000 + 100P where Q is the quantity per year, P is price, I is income per household, and A is advertising expenditure. If A = $10,000 and I = $25,000, what is the demand curve? Given the demand curve in part a., what is equilibrium price and quantity? If consumer incomes increase to $30,000, what will be the impact on equilibrium price and quantity?
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A nightclub manager realizes that demand for drinks is more elastic among students, and is trying to determine the optimal pricing schedule. Specifically, he estimates the following demands: • Under 25: qr = 18 − 5p • Over 25: q = 10 − 2p The two age groups visit the nightclub in equal numbers on average. Assume that drinks cost the nightclub $4 each. (a) Calculate the market demand.
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Yummy Yummy Popcorn, Inc. sells bags of flavored popcorn in a popular mall. As shop owner and operator, you have observed that weekly popcorn sales are well-described by the demand equation: Q = 1,200 - 800P + 2.0A, where A denotes advertising weekly spending (in dollars). You are currently charging $1.50 per bag of popcorn (for which the marginal cost is $.75) and spending $500 per week on advertising. a) Compute the store’s price elasticity and advertising elasticity. Please do fast ASAP fast please
The information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $200,000 (per year) to provide premium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero. 1. Assume there are two profit-maximizing digital cable TV companies operating in this market. Further assume that they are not able to collude on the price and quantity of premium digital channel subscriptions to sell, how many premium digital channel cable TV subscriptions will be sold altogether and what price will be charged when this market reaches a Nash equilibrium? 2. Under the conditions given in Question #3 of this problem, how much profit will each firm earn when this market reaches a Nash equilibrium? 3. What is the socially efficient level of digital premium channel subscriptions for this market and at what…