You Have Just Been Hired as Manager of a New

question 20

Essay

You have just been hired as manager of a new health spa in Retirement Village,Florida.The owner has commissioned a market study that estimates the average customer's monthly demand curve for visiting the health spa to be Q^d = 50 - 0.25P.The cost of operating is C(Q)= 3Q,where Q is the number of visits.The owner has been charging a $20 per month membership fee and a $5 per visit fee.Part of your salary is 10 percent of the monthly profits.Suggest a pricing strategy that will increase your salary.

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Definitions:

Benadryl

Benadryl is an over-the-counter medication commonly used to treat symptoms of allergies, such as sneezing, runny nose, and itching.

Epipen

A brand of auto-injector device designed to deliver a measured dose of epinephrine, commonly used to treat severe allergic reactions (anaphylaxis).

Metabolism

The set of chemical reactions that occur within a living organism to maintain life, involving the breakdown of substances to generate energy and the synthesis of substances necessary for life.

Nutrients

Essential compounds that organisms need to absorb from their surroundings or diet to support growth, reproduction, and health, including vitamins, minerals, proteins, fats, and carbohydrates.