A Professional Services Firm Is Investigating Yield Management as a Means

question 75

Essay

A professional services firm is investigating yield management as a means of taking advantage of unused capacity. Analysts for this firm estimate a demand curve for the firm's service, which is sold by the hour. Points on this demand curve include 9000 hours at the current rate of $60 per hour, 9500 hours at $55, 10,000 hours at $50, and 10,500 hours at $45. Based on this demand curve, what price point would be best for the firm, if its objective is maximum revenue?

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Definitions:

James Meredith

An American civil rights activist, the first African American student to integrate the University of Mississippi in 1962, amid widespread rioting and opposition.

ROTC

A college-based program for training commissioned officers of the United States Armed Forces.

Nikita Khrushchev

A Soviet leader during the Cold War, known for de-Stalinization, the Cuban Missile Crisis, and his role in the space race.

Cuban Missile Crisis

A 13-day confrontation in October 1962 between the United States and the Soviet Union over Soviet ballistic missiles deployed in Cuba, considered the closest the Cold War came to escalating into a full-scale nuclear war.