Answer the following true/false questions To implement revenue management, capac

Question

Answer the following true/false questions

To implement revenue management, capacity must be known and fixed at any moment. True False For durable/expensive goods, normally the short term price elasticity is lower than the long term price elasticity. True False Shifting from a single price scheme to two-price scheme (assume there is no arbitrageur, etc.) always increases consumer surplus. True False In e-Commerce era. prices for any product or service will converge to a single and minimum price. True False Overbooking is a prevalent business practice not only for airlines, but also for resort hotels and the cruise industry. True False When calculating the protection level for a higher price fare class, the demand distributions of lower price fare classes do not matter. False True

Explanation / Answer

2. True- to implement revenue management, cacacity should be known and fixed otherwise revenue would be non forecastable and it can adverse effect

3. for expensive gods as price increases in short run demand decreases so much but in long run these adjust automatically to equilibrium

4.False. shifting from single price to two price, producer surplus increases and consumer surplus is at minimum level

5.True. in e commerce era due to pure competition prices will converge to single and minimum.

9. True

10. False. demand for both segments should be considered.

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