54 Jim Jones, a motel owner, noticed that just down the street the "Motel 66" advertises a $66-per-night room rental rate on its sign. As a result, this com- petitor has rented all 80 rooms every day by late afternoon. Jim, on the other hand, does not advertise his rate, which is $85 per night, and he averages only a 72% occupancy of his 50 rooms. There are a lot of other motels nearby, but only Motel 66 advertises its rate on its sign. (Rates at the other motels vary from $68 to $110 per night.) Jim estimates that his actual incremental cost per night for each room rented, rather than remaining vacant, is $16. This $16 pays for all the cleaning, launder ing. maintenance, utilities, and so on. Jim believe his eight alternatives are: Alternative 123 2 3 4 67 Advertise and Charge 5 $78 per night 85 per night 92 per night 99 per night 8 $65 per night 72 per night 79 per night 86 per night Do Not Advertise and Charge Resulting Occupancy Rate your conclusion. 100% 93 82 68 72% 65 62 54 What should Jim do? Show how you reache