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Hotel Rooms in Radnor, PA go for $100 a day and 1,000 rooms are rented per day. To raise revenue, the Township Manager decides to charge a hotel tax of $10 per rented room. After the tax is imposed, the going rate for a hotel room is $108 ( the hotel decides to become efficient and not pass on the entire tax to the customer) and the number of rooms rented falls to 900.Calculate: The amount of revenue this tax raises for Radnor.The Township Manager then decides to double the tax to $20 per room. The hotel now charges $116 per room and the number of rentals per day falls to 800. Calculate: The amount of revenue this tax raises at the price of $116 per room. Does the tax double the revenue, more than double or less than double in the second example.
Hotel Rooms in Radnor, PA go for $100 a day and 1,000 rooms are rented per day. Toraise revenue, the Township Manager decides to charge a hotel tax of $10 per rentedroom. After the tax is…
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