The inverse demand curve facing a resort hotel is p = 300 – Q during the high season and p = 100 – Q during the low season. The resort’s marginal cost is $ 50 per night in cleaning costs for the room and general maintenance and administration. The resort has 100 rooms. What is the resort’s profit-maximizing peak- load pricing strategy? Illustrate the solution in a diagram.
Answer to relevant QuestionsParadise Cruises has a monopoly in renting luxury yachts for sailing in the Caribbean Sea. In winter its monthly inverse demand function is p = 200 – q. In summer the inverse demand function is p = 200 – 2q. Paradise has ...What are the main factors that increase the likelihood of a cartel being successful?A homogeneous- good duopoly faces an inverse market demand of p = 120 – Q. Firm 1 has a constant marginal cost of MC1 = 20. Firm 2’s constant marginal cost is MC2 = 30. Calculate the output of each firm, market output, ...Firms 1 and 2 produce differentiated goods. Firm 1’s inverse demand function is p1 = 260 – 2q1 – q2, while Firm 2’s inverse demand function is p2 = 260 – 2q2 – q1. Each firm has a constant marginal cost of 20. ...An incumbent firm, Firm 1, faces a potential entrant, Firm 2 that has a lower marginal cost. The market demand curve is p = 120 – q1 – q2. Firm 1 has a constant marginal cost of $20, where Firm 2’s is $10, and they ...
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