A Resort That Has Identified Young Upper-Middle Class Parents as a Market

question 56

Short Answer

A resort that has identified young upper-middle class parents as a market segment charges $1,300 for a four-day, three-night package for a mother, father and two children. The package includes golf fees and tennis court fees for the parents and a five-hour a day adult-supervised camp for the children. The ordinary four-day, three-night package for four costs $1,000. A single day at the camp for any child between the ages of 3 and 11 is $50. What kind of market segmentation pricing strategy is the resort using?

Comprehend the implications of using short-term over long-term financing, including interest rate risks.

Grasp the impact of cash management practices on the Cash Conversion Cycle (CCC).

Recognize the consequences of not adhering to offered trade credit discounts.

Understand the factors influencing the choice of short-term vs long-term financing.

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Definitions:

Marginal Social Cost

The total cost to society of producing one additional unit of a good or service, including both direct costs and any adverse impacts on third parties.

External Costs

Costs that affect parties who do not directly participate in an economic transaction, often not reflected in market prices (e.g., pollution).

Tax

A required financial imposition or alternative type of assessment placed on taxpayers by government entities to support government budgeting and assorted public outlays.

Efficient Level

Refers to the state where resources are allocated in a way that maximizes the net benefit to society, often achieved when marginal cost equals marginal benefit.