In Order for a Hotel to Successfully Price Discriminate So

question 67

Multiple Choice

In order for a hotel to successfully price discriminate so that senior citizens are given a discount,the hotel must be able to

• A) offset the economic loss from charging senior citizens a lower price by lowering the marginal cost of renting rooms to senior citizens.
• B) lower its prices to younger customers too.
• C) prevent senior citizens from reselling their rooms to younger customers.
• D) shift its demand curve rightward.
• E) determine if a senior citizen can pay a higher price.

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Definitions:

Gross Monthly Income

The total amount of income earned in a month before taxes and deductions.

Compounded Monthly

Interest or returns on an investment are calculated and added to the principal amount every month.

Amortized

Refers to the process of paying off debt over time in equal installments of principal and interest.

Compounded Monthly

A method of interest calculation where the interest earned each month is added to the principal, thus earning more interest in the following month.