Hospitality Revenue Management Final Exam
Review/ 196 Quizzes & Ans.
What is the industry term used to describe the sum of prices paid by a business's customers? -
Answer: total revenues
Historically, what concept have hospitality managers chiefly used to calculate their selling
prices? - Answer: costs
What is an algebraic equivalent of the formula: Sales = Costs + Profit? - Answer: profit=sales-
costs
What is the name for the value given up by a buyer and a seller in a business transaction? -
Answer: price
Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an example of
what type of pricing? - Answer: two-tiered pricing
Page 1 of 25
,What is the fundamental assumption upon which the concept of consumer rationality is based?
- Answer: Buyers act in ways that are of personal benefit to them
What is the revenue management term used to describe the perceived benefit gained, minus
the price paid, in a business transaction? - Answer: value
What is created when a seller communicates to a buyer a description of a product to be sold
and the price at which that product will be sold? - Answer: value proposition
Which of the following terms would be included in the Place portion of a hotel's marketing mix?
- Answer: distribution channels
What is the fundamental assumption upon which the Law of Supply is based? - Answer: The
higher the demand for a product the more of it will be produced by sellers
According to Alfred Marshall's work, if the price of a product is lower than the natural, or
equilibrium price, what will happen? - Answer: The demand for the product would exceed its
supply
Assume an equilibrium price (P1) is in place for a product. What would the law of supply and
demand predict as an outcome if demand for that product increased? - Answer: The new price
(P2) would be higher than the previous price (P1) and supply would increase
What concept is displayed by the intersecting point on a supply and demand curve? - Answer:
An estimate of the amount of a product that would be purchased at a known price and point in
time
Page 2 of 25
, What must be true if a product producer is to continue creating and selling products? - Answer:
Revenues must exceed costs
What is the specialized branch of accounting that focuses on recording and analyzing the
expenses incurred by an organization? - Answer: cost accounting
What is the industry term for the point at which an organization's revenues exactly equal its
costs? - Answer: break-even point
Which of the following foodservice costs is a variable cost? - Answer: food
Which of the following lodging costs is a fixed cost? - Answer: mortgage payments
What is the name for the net value achieved by both parties in a business transaction? -
Answer: profit
What element is not present in a barter economy? - Answer: money
What is the formula used to calculate an owner's ROI? - Answer: Owner's Investment Return /
Owner's Original Investment = Owner's Return on Investment
Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell 125 rooms
so she will be refusing 25 requests for rooms. What is this an example of? - Answer: constrained
supply
Which industry was the first to use Yield Management principles? - Answer: airline
What is the industry term used to describe the selling of rooms which are not actually available
for sale? - Answer: overbooking
Page 3 of 25
Review/ 196 Quizzes & Ans.
What is the industry term used to describe the sum of prices paid by a business's customers? -
Answer: total revenues
Historically, what concept have hospitality managers chiefly used to calculate their selling
prices? - Answer: costs
What is an algebraic equivalent of the formula: Sales = Costs + Profit? - Answer: profit=sales-
costs
What is the name for the value given up by a buyer and a seller in a business transaction? -
Answer: price
Charging guests for watching a "Pay-Per-View" movie in their hotel guestroom is an example of
what type of pricing? - Answer: two-tiered pricing
Page 1 of 25
,What is the fundamental assumption upon which the concept of consumer rationality is based?
- Answer: Buyers act in ways that are of personal benefit to them
What is the revenue management term used to describe the perceived benefit gained, minus
the price paid, in a business transaction? - Answer: value
What is created when a seller communicates to a buyer a description of a product to be sold
and the price at which that product will be sold? - Answer: value proposition
Which of the following terms would be included in the Place portion of a hotel's marketing mix?
- Answer: distribution channels
What is the fundamental assumption upon which the Law of Supply is based? - Answer: The
higher the demand for a product the more of it will be produced by sellers
According to Alfred Marshall's work, if the price of a product is lower than the natural, or
equilibrium price, what will happen? - Answer: The demand for the product would exceed its
supply
Assume an equilibrium price (P1) is in place for a product. What would the law of supply and
demand predict as an outcome if demand for that product increased? - Answer: The new price
(P2) would be higher than the previous price (P1) and supply would increase
What concept is displayed by the intersecting point on a supply and demand curve? - Answer:
An estimate of the amount of a product that would be purchased at a known price and point in
time
Page 2 of 25
, What must be true if a product producer is to continue creating and selling products? - Answer:
Revenues must exceed costs
What is the specialized branch of accounting that focuses on recording and analyzing the
expenses incurred by an organization? - Answer: cost accounting
What is the industry term for the point at which an organization's revenues exactly equal its
costs? - Answer: break-even point
Which of the following foodservice costs is a variable cost? - Answer: food
Which of the following lodging costs is a fixed cost? - Answer: mortgage payments
What is the name for the net value achieved by both parties in a business transaction? -
Answer: profit
What element is not present in a barter economy? - Answer: money
What is the formula used to calculate an owner's ROI? - Answer: Owner's Investment Return /
Owner's Original Investment = Owner's Return on Investment
Sandy has 100 hotel rooms to sell. This Saturday night has enough customers to sell 125 rooms
so she will be refusing 25 requests for rooms. What is this an example of? - Answer: constrained
supply
Which industry was the first to use Yield Management principles? - Answer: airline
What is the industry term used to describe the selling of rooms which are not actually available
for sale? - Answer: overbooking
Page 3 of 25
