Q1) To help this hotel earn higher profits, please calculate the profits of following two pricing strategies :a. when charging each guest the same price per night.b. when charging local guests and out-of-town guests a different price per night.

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An internal study revealed the market demand for a room at the Hotel del Luna as Q=350 - (5/6)P, where Q is the number of rooms per night and P is the price per room. The study also revealed the demand for two different types of guests - local guests and out-of-town guests. The demand for a room was estimated to be Qu=200-0.50PL for local guests and Qo=150- (1/3)Po for out-of-town guests. The operating costs of the Hotel del Luna are listed in the table below. Operating Costs: Hotel del Luna Fixed Expenses (per night) Front Desk & Guest Services Cable Contracts Equipment Decorations Other Variable Expenses (per night) Room Attendants Cleaning Maintenance Other $600 $300 $500 $5,000 $200 $1,200 $25 $20 $10 $5 An internal study revealed the market demand for a room at the Hotel del Luna as Q=350 - (5/6)P, where Q is the number of rooms per night and P is the price per room. The study also revealed the demand for two different types of guests - local guests and out-of-town guests. The demand for a room was estimated to be Qu=200-0.50PL for local guests and Qo=150- (1/3)Po for out-of-town guests. The operating costs of the Hotel del Luna are listed in the table below. Operating Costs: Hotel del Luna Fixed Expenses (per night) Front Desk & Guest Services Cable Contracts Equipment Decorations Other Variable Expenses (per night) Room Attendants Cleaning Maintenance Other $600 $300 $500 $5,000 $200 $1,200 $25 $20 $10 $5

Answer rating: 100% (QA)

Total nightly fixed expenses 7800 Total nightly variable expenditures 60Q 1 If each client is charge... View the full answer