A travel agency enters into a contract with a hotel chain which gives it priority access to 25 percent of its rooms in major tourist destinations throughout the year.The contract encourages the hotel chain to increase the number of rooms in each of these hotels.The investment made by the hotel chain corresponds to which of the following aspects of specificity?

Question

Quizplus · Accepted Answer

The investment made by the hotel chain to increase the number of rooms in major tourist destinations for the travel agency corresponds to dedicated specificity. Dedicated specificity refers to investments made by one party to meet the specific needs and requirements of another party, which cannot be used for other purposes. In this case, the hotel chain is investing in increasing the number of rooms in specific locations to meet the needs of the travel agency, which cannot be used for other purposes.

A Travel Agency Enters into a Contract with a Hotel