For products like parking lots and hotels costs of building, Business Economics

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For products like parking lots and hotels costs of building

For products like parking lots and hotels, costs of building capacity are mostly fixed or sunk and firms in this industry typically face capacity constraints. Therefore,

a. if SRMR>SRMC at capacity, then the firms should price to fill capacity

b. if SRMR

c. if LRMR>LRMC at capacity, then the firms should price to fill capacity

d. if LRMR

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Business Economics: For products like parking lots and hotels costs of building

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Business Economics: For products like parking lots and hotels costs of building

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