• Sox Shogun Hotel sold 2,000 rooms during the past month at an average daily room rate (ADR) of $70.00. During this month, the ADR is increased by $7.00 and the total number of rooms sold is 1,900. What is the price elasticity of demand? What is the effect of the decrease in the #of rooms to the total room revenue for the Sox Shogun Hotel during this month?

• In 2002, the construction cost of each room for Keava Garden Suites was $125,000. After 10 years, the management wants to renovate all of the rooms to catch the recent trends in room decoration so that they can capture more market share. In 2012, the renovation project cost for each room is $200,000. Based on the information given, calculate the percentage change in price of each room from 2002 to 2012.