Illustrate what is optimal protection level for full fare

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Q. Consider example of Park Hyatt Philly discussed in text. Recall which full fare is $225, expected full-fare demand is ~P (27.3), discount fare is $159, also re are 118 king/queen rooms. Now suppose cost of an occupied room is $45 per night. Which cost comprises labour associated with prepping also cleaning a room, additional utilities used also wear also tear on furniture also fixtures. Suppose Park Hyatt wishes to maximize expected profit rather than expected revenue. Illustrate what is optimal protection level for full fare?

 

 

Reference no: EM1378646

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