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. p. $ per night 400- 350- 300- 250- 200- 150- 100- 50- 0- 0 MR D 50 100 AMR 150 200 250 300 Q. Rooms per night MC DH 350 400 Q
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. p. $ per night 400- 350- 300- 250- 200- 150- 100- 50- 0- 0 MR D 50 100 AMR 150 200 250 300 Q. Rooms per night MC DH 350 400 Q
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: Monopolistic Competition
Section: Chapter Questions
Problem 8PA
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Question
![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fad942d81-d900-47bd-b390-ed511be993df%2F85f4ab0c-3e9a-4831-91e2-5cee7873ba05%2Fdlxn6ef_processed.png&w=3840&q=75)
Transcribed Image Text: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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