Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I know how to do part a and b but not sure about the part c,d and e Q2. Disney offers both hotel rooms and

image text in transcribedimage text in transcribedimage text in transcribed

image text in transcribedimage text in transcribed

I know how to do part a and b but not sure about the part c,d and e

Q2. Disney offers both hotel rooms and entrance to their theme parks at their resorts. Consider four different market segments with willingness to pay for rooms and market shares shown in the table below. Assume a total market size of 5,000 individuals per day. Segment Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee Room $200 $300 $325 $50 Theme Park $150 $50 $5 $200 Market Share 20% 10% 20% 50% a) Scenario A: Consider a Disney price menu with the Hotel Room at $300 and Theme Park Entrance at $150. Complete the chart by answering the following questions. i. Calculate the consumer surplus for each segment with each offering. (4 points) ii. Calculate the revenue earned from each offering and market segment. (4 points) Consumer Surplus Room Theme Park Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee Revenue Theme Park Room Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee b) Scenario B: Consider a Disney price menu of Hotel Room at $200 and Theme Park Entrance at $150. Complete the chart by answering the following questions. i. Calculate the consumer surplus for each segment with each offering. (4 points) ii. Calculate the revenue earned from each offering and market segment. (4 points) Consumer Surplus Room Theme Park Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee Revenue Theme Park Room Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee c) Scenario C: Consider a Disney price menu of Hotel Room at $325 and Theme Park Entrance at $200, and Hotel + Theme Park Bundle for $350. Complete the chart by answering the following questions. i. Calculate the consumer surplus for each segment with each offering. (6 points) ii. Calculate the revenue earned from each offering and market segment. (6 points) Consumer Surplus Theme Park Room Room + Theme Park Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee Revenue Room Theme Park Room + Theme Park Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee d) What are the optimal prices of the Hotel Rooms and Theme Park Entrance in the absence of bundling? (3 points) e) Compare the revenue obtained in part (c)(ii) with the revenue obtained in part (d)? (2 points) f) Explain the intuition about why bundling increases the overall revenue earned? (3 points) Q2. Disney offers both hotel rooms and entrance to their theme parks at their resorts. Consider four different market segments with willingness to pay for rooms and market shares shown in the table below. Assume a total market size of 5,000 individuals per day. Segment Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee Room $200 $300 $325 $50 Theme Park $150 $50 $5 $200 Market Share 20% 10% 20% 50% a) Scenario A: Consider a Disney price menu with the Hotel Room at $300 and Theme Park Entrance at $150. Complete the chart by answering the following questions. i. Calculate the consumer surplus for each segment with each offering. (4 points) ii. Calculate the revenue earned from each offering and market segment. (4 points) Consumer Surplus Room Theme Park Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee Revenue Theme Park Room Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee b) Scenario B: Consider a Disney price menu of Hotel Room at $200 and Theme Park Entrance at $150. Complete the chart by answering the following questions. i. Calculate the consumer surplus for each segment with each offering. (4 points) ii. Calculate the revenue earned from each offering and market segment. (4 points) Consumer Surplus Room Theme Park Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee Revenue Theme Park Room Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee c) Scenario C: Consider a Disney price menu of Hotel Room at $325 and Theme Park Entrance at $200, and Hotel + Theme Park Bundle for $350. Complete the chart by answering the following questions. i. Calculate the consumer surplus for each segment with each offering. (6 points) ii. Calculate the revenue earned from each offering and market segment. (6 points) Consumer Surplus Theme Park Room Room + Theme Park Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee Revenue Room Theme Park Room + Theme Park Amusement Park Lover Luxury Lover Conference Devotee Disney Devotee d) What are the optimal prices of the Hotel Rooms and Theme Park Entrance in the absence of bundling? (3 points) e) Compare the revenue obtained in part (c)(ii) with the revenue obtained in part (d)? (2 points) f) Explain the intuition about why bundling increases the overall revenue earned? (3 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accountability Of Local Authorities In England And Wales, 1831-1935 Volume 1

Authors: Hugh Coombs, J. R. Edwards

1st Edition

1138965758, 9781138965751

More Books

Students also viewed these Accounting questions

Question

How many applicants are you interviewing?

Answered: 1 week ago

Question

Over what timescale should the project be undertaken?

Answered: 1 week ago