Reference no: EM13981474
White Mountain Ski Resort has the following demand equations for its customers.
[Relating the final to Module I on D/S and Elasticity]
The demand equation for the resort as a whole:
Q = 1,000 -30P (P = 33.33 0.033Q with MR = 33.33 0.067Q)
The demand equation for Out of Town Skiers:
Q0 = 500 10P (P = 50 0.1Q with MR = 50 0.2Q)
The demand equation for Local Skiers:
Q1 = 500 20P (P = 25 0.05Q with MR = 25 0.1Q)And MC = $10 for all the skiers.
a. Suppose that White Mountain Ski Resort (WMSR) charges one price for all skiers, local as well as out of town skiers, what would be that one price? Please use two digits after dollar, say $10.52 in your answer.
b. How many local and out of town skiers would White Mountain Ski Resort be able to attract at that one price for all? Please round up you number of customers in your answer. For instance, if your answer were 105.60 round it up to 106 customers and if 83.30, round it down to 83 customers.
c. Who does WMSR attract more, local or out of town skiers at that one price for all and why?Thus WWSR attracts more out of town skiers than local customers.
d. Assuming that there is no fixed cost involved for simplicity, what would be total profit from that one price strategy above?
e. Would White Mountain Ski Resort be able to do better if the company chooses two different pricing strategy than one price strategy above, given the above information about its demand equations? Please provide quantitative basis for your answer prior to running number.
f. If the company decided to charge two different prices for local and out of town skiers, what would be the respective prices, one for local customer and the other for out of town customer?
g. How many local and out of town customers would White Mountain Ski Resort be able to attract from this two tier pricing strategy?
h. Compare potential profits from these two pricing strategies, one price for all and two different prices for local and out of town customers and discuss reason for the differences.
i. As a promotion for out of town skiers, WMSR decided to offer free skiing for first day if they stay more than one night at the resort hotel on its premise. What is the maximum number of skiers the company can expect if they are going to waive $10 marginal cost?
j. What would be the price to charge if the maximum number shows up.
k. Suppose only one half of the maximum number of out-of-towners showed up and stayed one more night. Is this promotional free skiing for the first day a smart strategy assuming that the price charged was the one you found in (j)? Please do not consider the revenue from staying at the resort overnight for this calculation.
|
Compete with these other companies
: The company president recently asked the controller, "Why can't we compete with these other companies? They're selling pumps just like our regular model for $212. That's only two bucks more than our production cost. Are we really that inefficient?..
|
|
How far apart is each maximum
: A) 650nm light is incident on a diffraction grating of 1200 lines per cm. If the wall is 5m away from the diffraction grating, how far apart is each maximum?
|
|
What is nash equilibrium outputs and resulting price
: Joe and Rebecca are small-town ready-mix concrete duopolists. The market demand function is Qd = 10000 − 100P where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. What is Joe’s best response function..
|
|
How much heat would need to be removed from a barrel
: Each question below is unique and do not borrow information from a previous part. Sometimes farmers use barrels of hot water to keep their barns warm in the winter. How much heat would need to be removed from a barrel (42L) for it to go from 90 oC ..
|
|
Assuming that there is no fixed cost involved for simplicity
: How many local and out of town customers would White Mountain Ski Resort be able to attract from this two tier pricing strategy?
|
|
Explain the emergence of an anti-globalization movement
: What is globalization (please define it both as a process and outcome)? What factors can you identify in explaining why globalization occurred? How do you assess its impact upon both rich countries and poor ones, in particular, the issue of inequalit..
|
|
What is the magnitude of the magnetic force on the wire
: A straight segment of wire of length 2.59 cm carries a current of 3.73 A in the positive y-direction. If the magnetic field in that region is 1.12 T in the positive x-direction, what is the magnitude of the magnetic force on the wire?
|
|
Matter of a woman bringing an infant
: In talking about cultural and environmental blocks, we discussed the matter of a woman bringing an infant into the workplace and the possible reactions of others. Consider the situation in which a classmate wants to bring her child to school in or..
|
|
Benign regionalism instead of malignant regionalism
: What is regionalism? Use European Union as an example to illustrate the major steps toward regional integration. What major features can you identify for regional integration in Europe. North America and 1'ast Asia? What are the dynamics for regional..
|