Suppose an​ ocean-front hotel rents rooms. In the​ winter, demand​ is:

P₁ = 110 - 1Q₁

with marginal revenue​ of:

MR₁ = 110 - 2Q₁

​However, in the​ summer, demand​ is:

P₂ = 260 - 1Q₂

with marginal revenue​ of::

MR₂ = 260 - 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.

During the​ summer, the​ profit-maximizing price is $______ and the​ profit-maximizing quantity is _______.

The marginal cost of production is higher during the _______ (Summer/Winter) during which time the hotel charges a _______ ( Higher/ Lower) price.

Please answer/discuss the following questions?

Assume you are the RM for a newly opened theme park in a major southwestern city. Your guests will consist primarily of families visiting the park, as well as schoolchildren on field trips and church youth groups. Yours is the only such park within 150 miles. Identify at least five non-cost factors you would want to consider as you determine the prices that will be charged for the menu items you will sell. Explain why you selected each factor chosen.

A Bacon Factory is located in a small town. Also in the town is a Water Park. The smell of the Bacon factory has adversely affected the Water Park such that it has put in air cleaning equipment to eradicate the odor created by the factory.

The cost function of the Bacon Factory is: CBF= B² + 4B^1/2 + (1 − x)²

where B denotes the quantity of bacon produced annually and x denotes the quantity of pollutants that A creates in a given year.

Thus, the Bacon Factory can limit production costs by eliminating its air scrubbers. However, the air pollution increases the costs for the water park W, whose cost function is: C_WP = W² + 2x where W denotes the number of visitors to the Water Park on an annual basis. Suppose that the unit price of admission to the water park is $3 and that the unit price of bacon is $32.5 per unit.

1. Compute the profit maximizing visits (represented by W) created by Firm W (assuming W behaves competitively in the output market). Notice that W does not choose x. Also, compute W’s profits.

2. Suppose now that the two firms B and W merge, creating B&W. The management of B&W now maximizes B&W’s profits by appropriately choosing x, B, and W. Find the quantities of Bacon, Water Park Visits, and pollutants that the new firm produces. Also, find the profits of B&W.

Serial Case

1. C6-72Calculate and compare cost estimates using high-low and regression methods (Learning Objectives 4 & 5)

This case is a continuation of the Caesars Entertainment Corporation serial case that began in Chapter 1. Refer to the introductory story in Chapter 1, here for additional background. (The components of the Caesars serial case can be completed in any order.)

Caesar Entertainment Corporation’s Form 10-K contains a variety of data in addition to financial statements. Below is a list that contains Caesars’ food and beverage costs (adapted) taken from its Statements of Operations for the past 22 years. In addition, the number of hotel rooms and suites owned by Caesars at the end of each of those 22 years has been gathered from other information provided in the Form 10-Ks.

Requirements (use excel)

1. Using the high-low method, find the following cost estimates:
   1. Variable food and beverage cost per hotel room/suite
   2. Fixed food and beverage cost per hotel room/suite
2. Perform a regression analysis using Excel. Use # of hotel rooms & suites as the X and the Food and beverage costs as the Y in your regression analysis.
   1. What is the estimated variable food and beverage cost per hotel room/suite?
   2. What is the estimated fixed food and beverage cost per hotel room/suite?
   3. In your opinion, is the number of hotel rooms and suites a good predictor of Caesars’ food and beverage costs? Why or why not?

Consider a city with three consumers: 1, 2, and 3. The city provides park land for the enjoyment of its residents. Parks are a public good, and the amount of park land (which is measured in acres) is denoted by z. The demands for park land for the three consumers are as follows:

D1 =40–z, D2 =30–z, D3 =20–z.

These formulas give the height of each consumer’s demand curve at a given level of z. Note that each demand curve cuts the horizontal axis, eventually becoming negative. For the problem to work out right, you must use this feature of the curves in deriving DΣ. In other words, don’t assume that the curves become horizontal once they hit the axis.

(a) The height of the DΣ curve at a given z is just the sum of the heights of the individual demands at that z. Using this fact, compute the expres- sion that gives the height up to the DΣ curve at each z.

(b) The cost of park land per acre, denoted by c, is 9 (like the demand intercepts, you can think of this cost as measured in thousands of dollars). Given the cost of park land, compute the socially optimal number of acres of park land in the city.

(c) Compute the level of social welfare at the optimal z. This is just the area of the surplus triangle between DΣ and the cost line.

(d) Suppose there are two other jurisdictions, each with three consum- ers, just like the given jurisdiction. Compute total social welfare in the three jurisdictions, assuming each chooses the same amount of park acres as the first jurisdiction.

(e) Now suppose the population is reorganized into three homoge- neous jurisdictions. The first has three type-1 consumers (i.e., high demanders). The second has three type-2 consumers (medium demand- ers), and the third has three type-3 consumers (low demanders). Repeat (a), (b), and (c) for each jurisdiction, finding the DΣ curve, the optimal number of park acres, and social welfare in each jurisdiction.

(f) Compute total social welfare by summing the social welfare results from (e) across jurisdictions. How does the answer compare with social welfare from (d)? On the basis of your answer, are homogeneous juris- dictions superior to the original mixed jurisdictions?

Firms pursuing a differentiation strategy primarily seek to:

E3-13 (1 goal) determination of the cost of assets [5 to 10 min yesterday Furniture Co.He bought a piece of land and paid $95, effective 000en over a note payable of $270,000.In addition, yesterday paid a property tax arrears by $2,000, property insurance at a cost of $2,500, and $3,000 to level the playing field and demolish the unwanted building.The company then built a building of offices at a cost of $550,000.It also paid $52,000 for a fence around the property, $17,000 by a notice near the entrance and $4,000 for a special batch lighting.Required 1.Determinar the cost of the land, as well as the mejoramicntos of the land and the building, 2.Which of these assets yesterday you depreciate? (Learning 1 goal) Global purchase of active [(10 a 15 min) Maplewood Propertics bought three lots in a subdivision for an inclusive price.]An expert independent valued batches as follows: Maplewood paid $240,000 in cash.E9-14 Lake value of appraisal batch 1 = 90 000, lot 2 = 60 000, lot 3 = 100,000 register the purchase at the newspaper, identifying the cost of each lot in an account separate from land.Round decimals to three places and use their calculated percentages.

An amusement park, whose customer set is made up of two markets, adults and children, has developed demand schedules as follows: Price ($) Quantity Adults Children 5 15 20 6 14 18 7 13 16 8 12 14 9 11 12 10 10 10 11 9 8 12 8 6 13 7 4 14 6 2 The marginal operating cost of each unit of quantity is $5. Because marginal cost is a constant, so is average variable cost. Ignore fixed costs. The owners of the amusement part want to maximize profits. Calculate the price, quantity, and profit if: The amusement park charges a different price in each market. The amusement park charges the same price in the two markets combined. Explain the difference in the profit realized under the two situations.

Violet Sky Entertainment is evaluating the trampoline park project, a 2-year project that would involve buying equipment for 54,000 dollars that would be depreciated to zero over 2 years using straight-line depreciation. Cash flows from capital spending would be $0 in year 1 and 5,000 dollars in year 2. Relevant annual revenues are expected to be 83,000 dollars in year 1 and 83,000 dollars in year 2. Relevant expected annual variable costs from the project are expected to be 10,000 dollars in year 1 and 10,000 dollars in year 2. Finally, the firm has no fixed costs in year 1 and one fixed cost in year 2 of the project. Yesterday, Violet Sky Entertainment signed a deal with Indigo River Marketing to develop an advertising campaign. The terms of the deal require Violet Sky Entertainment to pay Indigo River Marketing either 55,000 dollars in 2 years from today if the trampoline park project is pursued or 27,000 dollars in 2 years from today if the trampoline park project is not pursued. The tax rate is 40 percent and the cost of capital for the trampoline park project is 17.97 percent. What is the net present value of the trampoline park project?