A hotel booking website, VrBoNBo, is showing consumers a bas…
A hotel booking website, VrBoNBo, is showing consumers a base price on the first screen, and only adds resort fees and taxes at the check-out page. It runs an A/B test and finds that an increase in base room price reduces bookings by 30% more than the same price increase displayed as “fees”. Discuss what might happen to demand in the short-run and long-run if VrBoNBo decides to add a dollar to the base price and reduce a dollar from the fees.
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