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ECO 100 Strayer Businesses in The Hospitality Industry Economic Brief

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Economic Brief
ECONOMIC BRIEF
BRANDI WHITE
5/6/2020
Strayer University
Principles of EconomicsECO 100
Businesses in the hospitality Industry
The hospitality industry is always reinventing itself, continually adapting to the changing
expectations of travelers. The hospitality industry is broader than a lot of other sectors (Spacey,
2019). This industry can be connected to any company that is focused on customer satisfaction
and can meet almost any leisurely. This industry is broad, and some different aspects are
important to understand. The hospitality industry has many different business models depending
on the way the guests are hosted. An industry that comes from a business process that requires
extensive human attention. Hospitality is an industry that humans give significant value to.
Industry Goods and Services
The hospitality industry has a business within a business, which focuses on customer satisfaction
that relies entirely on customer's happiness.
Lodging is one of the primary services in this industry, mainly hotels, but also many other
lodging choices are offered.
Food and beverages are a large part of hospitality. This is a business that supplies restaurants,
cafes, bars, and also allow for catering. With restaurants, you also have to not only think of the
food and beverages but also the décor. There are recreation facilities that fall into this industry,

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and they offer to host theme parks, night clubs bowling alleys, and resorts. Entertainment falls
into this business that would include places like movie theaters that would invite people to a real
place. It also falls under health and sports facilities like ski resorts and spas. Different
transportation services offer meals, such as business class international flights. Tourist
attractions, arts and culture, and events such as concerts or industry conferences are all a large
part of the hospitality industry.
Market Structure and Characteristics
The lodging industry is a monopolistic market structure that is very competitive, with tons of
businesses selling all kinds of different products.
The prices in this market can be influenced by the type of products that are offered. There are so
many hotels and motels that can be compared to one another if one does not provide something
you can find another that has a similar price with comparable amenities. The lodging industry is
monopolistic characteristics consist of Many sellers, differentiated products, multiple
dimensions, and there is an easy entry of new firms in the long run. Because the products in
monopolistic competitive markets are slightly different because of advertising because they
usually offer pretty much the same amenities, such as in hotels, it can be how it is advertised that
can make or break the sale.
The above market structure has severe implications for the pricing of the industry's products and
services in the long run, as illustrated in this section. The perfect rivalry will name reasonable
profits under the long-run equilibrium. This profit will be critical in attracting new entrants into
the industry, making the existing customers defect using products for some other lodging firms.
This will harm the firm's market share since it will decrease. The already existing lodgings in the
industry will have to increase their expenditures on promotion and product as well as service
differentiation significantly to protect their profits. The extra spending will act to shift the ATC
up continuously until the profits disappear, and the resulting demand curve is directly tangent to
the ATC curve. It is essential to note that a highly competitive monopoly firm will not make a
long-run economic profit (Kim, 2013).
Cost ($)
LRMC
P1 LRAC
AR =D
MR

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Economic Brief ECONOMIC BRIEF BRANDI WHITE 5/6/2020 Strayer University Principles of Economics—ECO 100 Businesses in the hospitality Industry The hospitality industry is always reinventing itself, continually adapting to the changing expectations of travelers. The hospitality industry is broader than a lot of other sectors (Spacey, 2019). This industry can be connected to any company that is focused on customer satisfaction and can meet almost any leisurely. This industry is broad, and some different aspects are important to understand. The hospitality industry has many different business models depending on the way the guests are hosted. An industry that comes from a business process that requires extensive human attention. Hospitality is an industry that humans give significant value to. Industry Goods and Services The hospitality industry has a business within a business, which ...
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