problem 1:
a) With the help of an appropriate ex, define the principle of diminishing returns.
b) In brief describe the main funds available for long-term capital for a limited liability company.
problem 2: By using an illustration of your own choice, and with the help of diagrams, show how supply and demand analysis can describe:
a) Changes in price and output when a new competitor joins the market.
b) The effect of cheaper air travel to tourist resorts in Europe.
problem 3: Describe to what extent the growth of the family market has affected eating and drinking out at pubs and restaurants.
problem 4: Describe the implications of the given for the hospitality industry:
a) UK interest rates retained at low levels.
b) Reductions in government borrowing.
c) The £ Sterling to euro exchange rate falls.
d) The rate of inflation falls.
problem 5:
a) Define by using exs, what is meant by the oligopoly market.
b) describe the advantages of economies of scale to a large restaurant chain.
c) Describe the significance of bed and breakfast hotels in a traditional seaside location.
problem 6:
a) describe under what circumstances a company in the hospitality sector might consider a conglomerate merger.
b) With the help of illustrations, describe the benefits of a company achieving growth via franchising.
problem 7: The UK economy is now in a so-called double-dip recession and the Bank of England has continued to maintain low interest rates to try and encourage consumer spending. In addition, the £ Sterling is stronger against other currencies, specifically the euro, making it less attractive for holidays abroad for British holidaymakers. Assess how the hospitality industry might respond to such circumstances.
problem 8: A number of restaurant chains adopt a differential pricing policy to raise profits. With the use of illustrations, describe the reasons and effects of the given price differential policies:
a) A two-for-one offer for set adult meals.
b) Cheaper meals for senior citizens at specified times of the day.