1. Define the term economies of scale. Explain how each of the following economies of scale might be achieved in the hotel sector and which are likely to be achieved by membership of the 'Small Luxury Hotels of the World' group:

a. Financial

b. Buying and selling

c. Managerial/specialization

d. Technical

e. Economies of increased dimensions

f. Risk bearing.

2. Explain the relationship between MCs and last-minute price deals at hotels.