If the price of a room at the Meadows were to decrease by 20%, from $200 to $160, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Oceans from rooms per night. Because the cross-price elasticity of demand is rooms per night to , hotel rooms at the Oceans and hotel rooms at the Meadows are Oceans is debating decreasing the price of its rooms to $375 per night. Under the initial demand conditions, you can see that this would cause its total revenue to . Decreasing the price will always have this effect on revenue when Oceans is operating on the portion of its demand curve.

If the price of a room at the Meadows were to decrease by 20%, from $200 to $160, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Oceans from rooms per night. Because the cross-price elasticity of demand is rooms per night to , hotel rooms at the Oceans and hotel rooms at the Meadows are Oceans is debating decreasing the price of its rooms to $375 per night. Under the initial demand conditions, you can see that this would cause its total revenue to . Decreasing the price will always have this effect on revenue when Oceans is operating on the portion of its demand curve.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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