Use the Table Below to Answer the Following Questions)

question 50

Multiple Choice

Use the table below to answer the following questions) .
Below is a room overbooking model spreadsheet for the Metza, a hotel chain. The hotel has 425 rooms priced at $180 per day each, and is usually fully booked. Reservations can be cancelled any time before 5:00 p.m. with no penalty. The hotel estimates an average overbooking cost of
$150. Customer demand is set at 400 with an average cancellation of 20. $$\begin{array} { | c | c | c | } \hline & \text { A } & B \\\hline & \begin{array} { c } \text { Hotel Overbonking Model } \\\text { for the Metza group af } \\\text { hotels }\end{array} & \\\hline 1 & & \\\hline 2 & \text { Data } & \\\hline 3 & & \\\hline 4 & & \\\hline 5 & \text { Rooms Available } &425 \\\hline 6 & \text { Price per room } & \$ 180 \\\hline 7 & \text { overbonking Cost } & \$ 150\\\hline 8 & & \\\hline 9 & & \\\hline 10 & & \\\hline\end{array}$$ $$\begin{array} { | c | c | c | } \hline 11 & \text { Reservation Limit } & 425 \\\hline 12 & \text { Customer Demand } & 400 \\\hline 13 & \text { Reservation Made } & \\\hline 14 & \text { Cancellations } & 20 \\\hline 15 & \text { Customer Arrivals } & \\\hline 16 & \text { Overbonked Custarers } & \\\hline\end{array}$$
-Calculate the net revenue.

• A) $72,900
• B) $76,500
• C) $64,650
• D) $68,400

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Definitions:

Efficient Tax

A tax imposed in such a way that it creates the least possible distortion or inefficiency in the market or economy.

Costs Of Taxes

The economic burdens and inefficiencies that taxes impose on individuals and markets, including the distortion of consumer and producer behavior.

Taxpayers

Taxpayers are individuals or entities that are required to pay taxes to governmental bodies, based on earned income, property ownership, or other tax liabilities.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved or is not achievable, leading to a misallocation of resources.