Profit Determination for a Guided Tour Provider Operating in a Stochastic Environment

抄録

In this note, we study a guided tour providing firm that operates in a stochastic environment. The environment is stochastic because this firm's costs are deterministic but its revenues are stochastic. Since the revenues are stochastic, so the profits of this firm are also stochastic. For such a firm, we show how to compute the expected profit function for two cases. In the first case, the revenues accrued by the firm over time are continuous random variables and in the second case these same revenues are discrete random variables.

JEL Classification: L21, L83