5. The daily demand for rooms at a motel is given by P=100-2Q. Assume that the motel has 40 rooms.   5a. If total variable costs of running this motel are zero, find the price that maximizes profit and find the number of rooms rented at that price. Remember that profit is total revenue (i.e., TR = PQ) less total cost (i.e., the sum of variable costs and fixed costs).   5b. If the incremental cost of renting a room is $9 (i.e., the cost of paying the maid to clean the room, the cost of providing clean towels, the cost of the little pieces of chocolate that is placed on the bed, etc. is $9), find the price that maximizes profit and the number of rooms rented at that price.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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5. The daily demand for rooms at a motel is given by P=100-2Q. Assume that the motel has 40 rooms.

 

5a. If total variable costs of running this motel are zero, find the price that maximizes profit and find the number of rooms rented at that price. Remember that profit is total revenue (i.e., TR = PQ) less total cost (i.e., the sum of variable costs and fixed costs).

 

5b. If the incremental cost of renting a room is $9 (i.e., the cost of paying the maid to clean the room, the cost of providing clean towels, the cost of the little pieces of chocolate that is placed on the bed, etc. is $9), find the price that maximizes profit and the number of rooms rented at that price.

 

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