The owner/manager of the Riverview Inn has seen occupancy dip over the last six months to 60 percent and has requested your assistance with proposed room rate discounting. The marginal cost per room sold is $20 at the Riverview and the average daily rate has been $80.

1. Determine the equivalent room occupancy (ERO) if the ADR is reduced by $10.

2. Determine the ERO if the ADR is reduced from $80 by 10 percent.