12.20. La Durazno is the only resort hotel on a small desert island off the coast of...
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12.20. La Durazno is the only resort hotel on a small desert island off the coast of South America. It faces two market segments: bargain travelers and high-end travelers. The demand curve for bargain travelers is given by Q1 ! 400 " 2P1. The demand curve for high-end travelers is given by Q2 ! 500 " P2. In each equation, Q denotes the number of travelers of each type who stay at the hotel each day, and P denotes the price of one room per day. The marginal cost of serving an additional traveler of either type is $20 per traveler per day.
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