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Author Question: What is the price-quality effect and why is it important? What will be an ideal response? (Read 139 times)

Mr3Hunna

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Question 1

Why do you think that rental car customers bear such a high tax burden?
 
  What will be an ideal response?

Question 2

What is the price-quality effect and why is it important?
 
  What will be an ideal response?



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jasonq

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Answer 1

Airport customers, subject to the tax, do not live in the area and, hence, do not vote for local politicians. Thus, politicians are unlikely to suffer at the ballot box from such a tax. Revenues collected from this source also serve to reduce the burden placed on locals.

Answer 2

The price-quality effect describes a presumed relationship between ADR and its product quality. There should be a positive connection because quality generally commands a commensurately high price, i.e., top dollar for top facilities, amenities, and service.



Mr3Hunna

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Both answers were spot on, thank you once again



jasonq

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