Scenario 15-10 Vincent Operates a Scenic Tour Business in Boston. He Has

question 654

Multiple Choice

Scenario 15-10
Vincent operates a scenic tour business in Boston. He has one bus which can fit 50 people per tour and each tour lasts 2 hours. His total cost of operating one tour is fixed at $450. Vincent's cost is not reduced if he runs a tour with a partially full bus. While his cost is the same for all tours, Vincent charges each passenger his/her willingness to pay: adults $18 per trip, children $10 per trip, and senior citizens $12 per trip. At those rates, on a typical day Vincent's demand is: Assume that Vincent's customers are always available for the tour; therefore, he can fill his bus for each tour as long as there is sufficient total demand for the day.
-Refer to Scenario 15-10. What is Vincent's profit on a typical day?

• A)$660
• B)$820
• C)$1,350
• D)$2,170

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Definitions:

Market Potential

The maximum total sales revenue of all providers within a specific market, assuming complete saturation and optimal selling conditions.

Sales Forecast

The quantity of products a business plans to sell during a future time period.

Market Segmentation

Breaking down populations of people into groups, or target markets.

Marketing Strategy

A business's overall game plan for reaching prospective consumers and turning them into customers of their products or services.