In Europe It Is Common for Hotel Guests to Ask

question 97

Essay

In Europe it is common for hotel guests to ask to see the room before they agree to rent it for the night. Which difference between a service and a product does this custom help to overcome?

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Definitions:

Negative Externalities

Negative externalities are detrimental effects suffered by a third party due to an economic activity, where the cost of these effects is not reflected in the market price.

Energy Production

The process of generating electricity or other forms of energy through various sources like fossil fuels, nuclear power, or renewable sources.

Additional Cost

The increase in total cost that arises from an increase in the level of output by one unit; also known as marginal cost.

Relative Price Of Oil

The price of oil compared to other goods and services, indicating how much of other goods/services one can trade for a unit of oil.