A hotel in a major metropolitan area has 1500 rooms the


A hotel in a major metropolitan area has 1500 rooms. The hotel management knows from the past experience that a room rate of $120 a night results in 92 % occupancy. It is also known that a 5 % increase in rate leads to a 3 % decline in the occupancy rate. If demand is linear, what rate should the hotel charge to maximize revenue? What would be the occupancy rate?

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Microeconomics: A hotel in a major metropolitan area has 1500 rooms the
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