Economics Homework - Hotel Del Luna Profit Maximization
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Hotel Del Luna has 80 rooms with a constant marginal cost of $60. During the high season, the demand equation is QH = 1200 - 4PH, where QH is the number of rooms and PH is the room rate per night during the high season. During the low season, the demand equation is QL = 800 - 2PL where QL is the number of rooms and PL is the room rate per night during the low season. What are the profit-maximizing room rates during the high season and the low season?