managerial economics

(1) The increased cost of taking over this business and the increased income of taking over this business.

New income: 80 rooms * 50 yuan per day *7 days = 28,000.

Accounting cost: 80 rooms * 8 yuan variable cost * 7 = 4480, and the fixed cost is sunk cost, not new cost, so it is not considered.

Opportunity cost: The estimated occupancy rate is 40%, that is, there are 120*60%=72 rooms available. That is to say, after taking this business, there will be 8 more rooms, so the opportunity cost is: 8 reserved rooms * 80 yuan every day *7 days =4480.

This adds up to 8960.

New net income = new income-new cost = 28000-8960 > 0, so I have to take this business.

(2) Lowest price for this business: 8960/(80 rooms *7 days) = 16 yuan.

Reason: When new revenue = new cost, the price is the lowest. When the net income is zero.

Lowering the price will reduce the new income, but it will not affect the new cost. Therefore, the algorithm formula of new income is applied:

80 rooms * x yuan per day *7 days = 8960, and solve the equation X= 16 yuan.