Scenario 15-1 Vincent Operates a Scenic Tour Business in Boston. He Has

question 186

Short Answer

Scenario 15-1
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is: Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day.
-Refer to Scenario 15-1. One of Vincent's friends tells him he would be more profitable if he charged a single price of $12. Assuming no changes in consumer demand, what would Vincent's profit be if he charged every customer $12?

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Definitions:

Free Will

The concept that humans have the ability to make choices that are not predetermined by past events, genetics, or conditioning.

Rationality

The quality of being based on or in accordance with reason or logic.

Cognitive Complexity

An individual's ability to understand and process multiple and detailed aspects of information simultaneously.

Diverse Influences

Various factors or elements from a wide range of sources that affect or shape individuals or systems.