Question
In: Economics
A large city hotel serves two types of customers/guests: general visitors (gv), and convention attendees (ca)....
A large city hotel serves two types of customers/guests: general visitors (gv), and convention attendees (ca). Their respective daily demand functions are: For the general visitors segment Q gv = 1,400 – 10 Pgv, and for the convention attendees segment Qca = 2,400 -20 Pca. The marginal cost for serving an additional guest is the same, regardless of the type of customer, and the hotel’s daily Total Cost function is: T.C. = 18,200 + 30 Q.
- With price discrimination, how many rooms should this hotel offer to in each market segment, and what rate (price) should it charge to each group of customers?
- What would this hotel’s daily profits be?
- What would the mark-up, as a percentage of the membership price, be in each market segment?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
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