Mathematically, a 10 percent increase in occupancy will exactly offset a 10% rate discount. A 20 percent increase in occupancy will exactly offset a 20% rate discount.

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Quizplus · Accepted Answer

A 10% increase in occupancy does not exactly offset a 10% rate discount due to the multiplicative nature of revenue calculations. The overall revenue impact depends on the original occupancy and rate levels, and similarly for a 20% change. The percentage increase in occupancy and the percentage discount in rate do not linearly equate to an unchanged revenue.

Mathematically, a 10 Percent Increase in Occupancy Will Exactly Offset