Jim Jones, a motel owner, noticed that just down thestreet
Chapter , Problem 1-65(choose chapter or problem)
Jim Jones, a motel owner, noticed that just down thestreet the Motel 36 advertises a $36-per-night roomrental rate on its sign. As a result, this competitor hasrented all 80 rooms every day by late afternoon. Jim,on the other hand, does not advertise his rate,which is $54 per night, and he averagesonly a 68%occupancyof his 50 rooms.There are a lot of other motels nearby, but onlyMotel 36 advertises its rate on its sign. (Rates at theother motels vary from $48 to $80 per night.) Jimestimates that his actual incremental cost per nightfor each room rented, rather than remaining vacant,is $12. This $12 pays for all the cleaning, launder-ing, maintenance, utilities, and so on. Jim believeshis eight alternatives are: What should Jim do? Show how you reachedyour conclusion
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