Question

(Consider This) An otherwise unprofitable motel located on a largely abandoned roadway might be able to stay open for several years by:

A. increasing its nightly room rates.
B. reducing or eliminating its annual maintenance expenses.
C. charging room rates that exceed marginal revenue.
D. eliminating its fixed costs, including its opportunity costs.

Answer 1

Answer:B. reducing or eliminating its annual maintenance

Explanation: Maintenance cost is the amount spent in carrying out repairs,replacement and other special jobs on a given apartment, equipped and other things.

Several approaches can be put in place to ensure that maintenance cost are either eliminated or reduced. By putting in a place a good management system such as preventive checks( where it is expected that a regular check and observation of the motel is one to avoid major breakdown) this is a very effective way to reduce or eliminate annual maintenance cost.

Annual maintenance cost has been known to be very expensive,when reduced or eliminated I might help the motel to remain open for several years.