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Nirvana Resort operates in an oligopoly. The resort's room rentals are 0 per night at a rate of $175, 20 at $160, 40 at $145,
Nirvana Resort operates in an oligopoly. The resort's room rentals are 0 per night at a rate of $175, 20 at $160, 40 at $145, 45 at $130, and 50 at $115, as shown in the graph below. Nirvana Resert's Demand and Marginal Revenue Curves :3 per room 190 1?5 160 145 130 115 100 85 TU 55 40 25 1D -5 -20 0 5 B 10 15 20 25 30 35 40 45 50 55 Rooms per night a. Fill in this table. Remember that marginal values for marginal product are shown in rows between those used to show total and average values. Include a minus sign (-) for any negative values. (2) (1) Quantity (3) (4) Price (rooms per Total Revenue Marginal Revenue ($ per room) night ($) ($ per room) 175 160 145 130 115 b. Why does the resort face a kink in its demand curve at a quantity of 40 rooms per night? In the ranges 0 to 20 rooms and 20 to 40 rooms, each time the price falls by $ . Quantity on the demand curve increases by rooms. In the ranges 40 to 45 rooms and 45 to 50 rooms, each time the price falls by $ Quantity on the demand curve increases by rooms. c. Why does the resort's MR curve have a vertical segment at the quantity associated with the kink in the demand curve? The MR segment associated with the upper portion of the demand curve has a (Click to select) value at 40 rooms than does the MR segment associated with the lower portion of the demand curve. (Click to select) higher lower
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