The MICRO INN Hotel charges $20 per person for breakfast and serves approximately 40 guests per...

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The MICRO INN Hotel charges $20 per person for breakfast and serves approximately 40 guests per day. A local coffee shop, a few blocks away, charges $12 for breakfast and serves approximately 80 customers per day. When the MICRO INN increased the price for its breakfast to $25, the number of guests having breakfast in the hotel decreased to 30 and the number of customers having breakfast in the local coffee shop increased to 90. Please answer the following questions: 1) Calculate the price elasticity of demand for breakfasts in the MICRO INN. 2) How would you term this demand for breakfast in the hotel? Price elastic, or price inelastic? Please explain. 3) Calculate the change in the MICRO INN's total revenues from breakfasts. Do you expect the revenues of the hotel to increase, decrease or remain unchanged? Please explain. 4) Calculate the cross elasticity of demand for breakfasts in the MICRO INN and the local coffee shop. 5) Is breakfast in the two places a substitute, a complementary or a not related service? Please explain. The MICRO INN Hotel charges $20 per person for breakfast and serves approximately 40 guests per day. A local coffee shop, a few blocks away, charges $12 for breakfast and serves approximately 80 customers per day. When the MICRO INN increased the price for its breakfast to $25, the number of guests having breakfast in the hotel decreased to 30 and the number of customers having breakfast in the local coffee shop increased to 90. Please answer the following questions: 1) Calculate the price elasticity of demand for breakfasts in the MICRO INN. 2) How would you term this demand for breakfast in the hotel? Price elastic, or price inelastic? Please explain. 3) Calculate the change in the MICRO INN's total revenues from breakfasts. Do you expect the revenues of the hotel to increase, decrease or remain unchanged? Please explain. 4) Calculate the cross elasticity of demand for breakfasts in the MICRO INN and the local coffee shop. 5) Is breakfast in the two places a substitute, a complementary or a not related service? Please explain.

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Micro Local PI PI 8 12 Ol80 P23415 0250 02120 PEA 0201 X PI ... View the full answer