Solve the Problem. -A 60 Room Hotel Is Filled to Capacity Every Night

question 76

Multiple Choice

Solve the problem.
-A 60 room hotel is filled to capacity every night at a rate of $40 per room. The management wants to determine if a rate increase would increase their profit. They are not interested in a rate decrease. Suppose management
Determines that for each $2 increase in the nightly rate, five fewer rooms will be rented. If each rented room
Costs $8 a day to service, how much should the management charge per room to maximize profit?

• A) $50
• B) $45
• C) $42
• D) The management should leave the rate as it is.

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