Classroom Companion: Business

 
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Answers
1. Airbnb allows people to rent out their homes. This is how Airbnb thereby cre-
ates a “long tail” to the supply of available vacation resorts for tourists. Airbnb 
contributes to the supply side of the tourist industry. Airbnb are different from 
hotels. They have few rooms available (typically accommodating 2–5 guests) 
and may be situated outside the city center, where most hotels are located. 
They may also be cheaper or offer facilities not available at hotels. The demand 
aspect of this is that people often prefer to rent unique homes, vacation homes, 
or rooms with bread and breakfast rather than hotels.
2. On the supply side, Uber creates a long tail in the taxi market by enabling pri-
vate drivers to offer transport using their private cars. This includes that the 
driver may offer special service such as a ride in a sport car, limousine, van, 
motorcycle, and so on. On the demand side, the market for personal transport 
has been increased both in size and diversity.
3. Apply the general power-law distribution and observe that:
 
Chapter 16 · The Long Tail

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241
16
f
k
1000
1000
2
6 1000
6 10
6 08 10
2
2
2
6
2
7



 

 


 









 



.
If there are ten million routers on the Internet, it is expected that 
10
7
× 6.08 × 10
−
7
≈ 6 routers have 1000 connections. The expected number of 
routers with one connection is:
10
1
10
1
2
6 10
6 000 000
7
7
2
7
2

 


 
 




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