Scenario 15-11
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 15-11. Vincent uses a pricing practice called
Definitions:
Business Ownership
Refers to the legal possession of a business enterprise, including sole proprietorship, partnership, or corporation.
Franchisor
A business entity that grants licenses to franchisees to operate under its brand and sell its products or services.
Negotiate
The process of discussing terms and reaching agreements in various contexts, such as business deals, contracts, or disputes.
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