A 300 room hotel can rent every one of its rooms at $80 per room. For every $1 increase in rent, 3 fewer rooms are rented. How much should the hotel charge for each room to maximize its daily revenue? What is the maximum daily revenue?

The hotel charge for each room to maximize its daily revenue and the maximum daily revenue is explained below in details.

Step-by-step explanation:

So for every $1 hike in price, the number of rooms goes underneath by 1.

So the earnings can be displayed by R(x) = (300-x)(80+x)

From that, you require to subtract 22(300-x) since it takes $22 per occupied room.

AND there is a framed cost of $1000 per day.

So your profit function is P(x) = (300-x)(80+x) - 22(300-x) - 1000

Simplified, this is P(x) = -x2 +242x + 16400.

P'(x) = -2x + 242  Set it = to 0

x = 121 which displayed the number of unoccupied rooms.

P(121) = -14641 + 29282 + 16400 = $31041

You can verify by computing P(120) and P(122) which both even $31040.

Hope this helps.