Business travelers on each night is normally distributed

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Reference no: EM132163376

A hotel operator has 200 rooms in a competitive market, where they are a price-taker. During the summer season, leisure travelers are abundant. During this season, the market rate for leisure travelers booking through online platforms such as Expedia is $109 per night. The market rate for business travelers, who generally book with less than one week’s notice, is $185 per night.

a. Demand for business travelers on each night is Normally distributed with a mean of 60 and a standard deviation of 20. If the hotel does not overbook, how many rooms should it offer for each night at the leisure rate ($109) before it raises its price?

Reference no: EM132163376

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