The inverse demand curve facing a resort hotel isduring the low season andPL = 100-Q₁PH = 350 – QHduring the high season. The resort's marginal cost is $50 per night in cleaning costs for the room andgeneral 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.1.) Using the point drawing tool, indicate the profit-maximizing price during the low season. Label thispoint 'e'2.) Using the point drawing tool, indicate the profit-maximizing price during the high season. Label thispoint 'eHCarefully follow the instructions above, and only draw the required objects.p. $ per night69400-350-300-250-200-a 150-100-50-0-0MR DMRH50 100 150 200 250 300Q, Rooms per nightMGDH350400QON

Peak price loading is a pricing strategy adopted by a monopoly. In this strategy, the monopoly…

The inverse demand curve facing a resort hotel is during the low season and PL = 100-QL PH = 350 - Qu 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.

The inverse demand curve facing a resort hotel is during the low season and PL = 100-QL PH = 350 - Qu 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.

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

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 13E

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The inverse demand curve facing a resort hotel is during the low season and PL = 100 - QL PH = 400 - QH 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 100 rooms. What is the resort's profit-maximizing peak-load pricing strategy? Illustrate the solution in a diagram. 1.) Using the point drawing tool, indicate the profit-maximizing price during the low season. Label this point 'e.' 2.) Using the point drawing tool, indicate the profit-maximizing price during the high season. Label this point 'e.' Carefully follow the instructions above, and only draw the required objects. C p, $ per night 400- 350+ 300- 250- 200- 150- 100- 50- 0+ 0 MR D 50 ☆ H MR' 100 150 200 250 300 Q, Rooms per night MC DH 350 400 LY
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