Economics

Economics

Odense Bike Rental has been considering collaborating with a H.C. Andersen expert, and together do guided H.C Andersen cycling tours around Odense for groups of 5-10 tourists. The idea is that the guided tours are sold as group tours (5-10 people) at a fixed price. By looking at similar guided tours in other cities, the following relationship between price and sales has been found, for a group tour (5-10 tourists).

Price Sales volum
1500
1350 3
1200 6
1050 9
900 12
750 15
600 18

The variable unit costs are 250 kr. per guided tour of 5 to 10 tourists. During talks with the H.C. Andersen expert, it is decided that there can be sold up to 18 guided tours over the summer.

3.1: Calculate the optimal price and sales

A hotel has contacted Odense Bicycle Rental, and offered to buy X-number of group tours (5-10 tourists) at a set price of 500 kr. As the hotel provides lunch for the tourists, the variable unit costs will only be 175 kr.

3.2: Explain whether this offer is attractive and if it will affect the previous pricing.

find the cost of your paper