Kristy, Managerial Economics

Rail Tours sells packaged tours on rail lines, including gourmet meals and a reserved bed. The most popular tours are in the autumn when colors are at their peak. The overnight package for Saturday and Sunday morning are especially heavily booked. A market survey firm has just completed a study in which they conclude that if the package cost is $200 per couple, then Rail Tours can expect to sell 400 spaces on a typical Saturday. If the prices is raised to $225, unit sales drop to 380. The survey firm also reports that if per-capita income changes, Rail Tours can expect a large change in bookings. In particular, if per-capita income falls by 1%, then bookings will probably fall by 2%.
a. If the demand curve is extrapolated from the data points given, what is the equation for demand? Are there any precautions in extending the curve in this matter?
b. Are tours normal or inferior goods? Why?
c. If you were responsible for making a forecast for bookings, would you accept this forecast as is? Would you wand additional information about demand? If so, what sort? Explain.
Posted Date: 11/12/2012 5:57:36 PM | Location : United States







Related Discussions:- Kristy, Assignment Help, Ask Question on Kristy, Get Answer, Expert's Help, Kristy Discussions

Write discussion on Kristy
Your posts are moderated
Related Questions
Problem 1: All economies of the world can be said to be ‘mixed', to a greater or lesser degree, in that there is no economy where there is no state activity and no economy wher

The services of a certified psychologist cost $110 per hour, and an extended health plan covers 50 percent of that cost. Under the plan, the clients covered used 625 hours of this

Harrod Domar Theory A basic principle that has been stressed by both Harrod and Domar in their growth models and which has been incorporated in all modern growth theories is th

Green Shield Insurance gives NEMO Corporation with coverage for prescriptions, dental work, and extended health services. Every subscriber uses $435 worth of dental services per ye

WHAT ARE THE PRINCIPLES OF MANGERIAL ECONOMICS

Individual firm and market supply curves The quantities and prices in the supply schedule can be plotted on a graph. Such a graph is called the firm supply curve. A fir

What are the conclusions about the cost of production and efficiency in the long-run equilibrium of a perfectly competitive industry? Three conclusions regarding the cost of pr

demand function is q=4850 - 5p(1) + 1.5p(2) + 0.1 Y WHEN Y=10000 p(1)=200 p(2)= 100 find income elasticity of demand for p(1)

how much output should a firm produce? 80$ per unit C(Q)=40+8Q+2Qsquared

State the Traditional demand theory So an over-simplified and the most commonly stated demand function is: Dx = f (PX) thatconnotes that demand for commodity X is the function