Explain How the Listed Events (A-D)would Affect the Following at Hilton

question 262

Essay

Explain how the listed events (a-d)would affect the following at Hilton Hotels.
i.Marginal cost
ii.Average variable cost
iii.Average fixed cost
iv.Average total cost
a.Hilton decides on an across-the-board 5 percent increase in executive salaries.
b.Hilton decides to eliminate all print advertising.
c.Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers.
d.The federal government starts to levy a $5 room tax on all hotel rooms.

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Definitions:

Risk-Free Asset

An investment with zero default risk, typically government bonds, providing a basis for comparing with riskier assets.

Beta

A method for appraising the degree of variation, or consistent peril, of a security or investment pool versus the market at large.

Expected Return

The anticipated amount of profit or loss an investment is likely to generate over a given period.

Market Return

The total return on investment in the stock market, comprising capital gains and dividends, over a specific period.