(Graphics not included) In casino marketing practice, it is sometimes not easy to distinguish which measure should be regarded as a price reduction and which measure should be regarded as a cost increase . For example, when a casino provides free points to its customers, is it a price measure or a cost measure? Of course, it is not important for casino managers or accountants to clarify such conceptual differences. However, it is very important for economists because the theoretical tools that economists can easily use are almost all derived from other ordinary sectors where price is something that is related to consumer demand and cost is something that is related to the profitability of a 'business. Therefore, in order to clearly draw a marginal revenue curve and a marginal cost curve for the casino industry so that we clearly know where the equilibrium lies, we need to give a clear definition: all marketing measures taken by a casino are increasing its costs except those that directly reduce the house advantage. Precisely according to this definition, the marginal revenue curve of the VIP sector in this model shows a flat line parallel to the as a marketing tool. Instead, all marketing measures taken are not actually aimed at marketing customers, but at recruiting customers, and are therefore only cost-related. In terms of the marginal cost curve, there are also some significant figurative differences between the two casino industries. The marginal cost curve of the walk-in sector shows a “turnaround” figure. This can be explained by this fact: Macau is not an ideal tourist destination. The number of customers who come in is basically an exogenous variable. v Once the one-time customers are fully occupied, to attract more one-time customers, the marginal cost will increase sharply and suddenly unless the external market situation improves significantly and unless Macau, as a tourist destination, improves significantly significant. In contrast, the marginal cost curve of the VIP industry is much flatter, although it is also rising, which reflects this reality: to some extent, the VIP market is unlimited, and recruiters can go anywhere in the world to recruit customers. However, the wider the reach, the more the casino will have to pay to get new customers. This is actually happening in Macau's VIP lounge system. SJM has some “fringe” VIP lounges. The casino pays a higher dead chip fee and/or requires a lower deposit from VIP lounge contractors due to their target markets or core customers
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