You have just started work for a small company, FitCo that develops private fitness clubs in small towns. FitCo buys or leases a local hotel or motel, then renovates to provide a gym, swimming pool, sauna, Jacuzzi, and a small café where patrons can buy juices, smoothies, and other healthy snacks . FitCo only develops clubs in towns where it has no competitors. The main product is a one-month membership, which gives patrons unlimited use of the gym and other club facilities. So far FitCo has opened 24 such clubs in different towns.
Your new boss, Sarah, gives you a copy of an Excel spreadsheet containing data collected last year on FitCo’s 24 existing clubs. She asks you to use the data to complete the following important and time-sensitive tasks:
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This example case study belongs to Managerial Economics. The question is about a fitness development company. The demand function needs to be interpreted along with price elasticity of demand and income elasticity of demand. The data given in the excel sheet about the company’s performance last year are given. These are to be used for calculating the given questions. The solution contains all the answers.
Total word count 1385
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