Question
A hotel at a popular holiday destination is fully booked out for the next 6 nights. The hotel has 150 rooms. All rooms in the
A hotel at a popular holiday destination is fully booked out for the next 6 nights. The hotel has 150 rooms. All rooms in the hotel are considered to be of similar quality (e.g. in terms of size, view, amenities, etc.), so each room was booked for $175 per room per night. (Furthermore, assume for the purpose of this question that room bookings are non-transferrable, which means that guests with room bookings are unable to sell their booking for a higher price to someone who missed out on securing a room booking). The maximum a consumer was willing to pay for a hotel room was $337 per room per night (where total rooms booked would = 0 if the room price was any higher). Assuming a linear demand curve, what was the consumer surplus from all 6 nights. Answer to the nearest whole number (with no decimal places).
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