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Production and costs
If the average cost of a hotel room is $50 per night, then it is more profitable to let that room at $35 for a standby rate
a) yes-to encourage people to come to the hotel b) yes-if the cost of accommodating that person that night is less than $35 and the room would otherwise be vacant c) no-if you rent out for less than %50 per night, you will make a loss |
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