1. As the new general manager of the Grand Palladium Jamaica luxury all-inclusive resort, you are assessing your pricing policies. Currently, the price of a weekend stay is $2,000 per guest. You estimate the marginal cost of serving a guest at $1,600, and while your predecessor unfortunately did not leave you data from the pricing experiments and test marketing she performed, you do know that such experiments were done, and that your predecessor was competent.
2. What is your best estimate of the elasticity of demand for a weekend stay at the Grand Palladium?