Franchising Is a Concept That Allows Hotels To

question 44

Multiple Choice

Franchising is a concept that allows hotels to:

• A)expand rapidly by using other people's money
• B)pay a fee based on a percentage of gross revenue to the owners
• C)provide tax benefits to investors
• D)provide careful consideration to the location of new properties

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Definitions:

Marginal Cost Function

A mathematical representation showing how the cost of producing one additional unit of a good changes as production volume changes.

Optimal Output

The level of production that maximizes a firm’s profit or minimizes its cost under given conditions.

Profit

The financial gain acquired when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Industry Supply Curve

A graph that shows the relationship between the price of a good and the total output of the industry for that good.