BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Sleeping rooms at a hotelare considered a perishable commodity. Each night, when a room goes unsold, the hotel losesthat opportunity to ever sell it again. A hotel cannot regain that opportunity. This is calledopportunity cost.

Detailed explanation-2: -Opportunity cost (also known as “alternative cost, ”) is the difference between a project’s cost estimate and another option that must be foregone in order to implement the project. Every choice we make also means giving up another option.

Detailed explanation-3: -Sleeping rooms at a hotel are considered a perishable commodity. Each night, when a room goes unsold, the hotel loses that opportunity to ever sell it again. A hotel cannot regain that opportunity. This is called opportunity cost.

Detailed explanation-4: -Hotel room nights are ‘perishable’ You may associate ‘perishability’ with rotting fruit or vegetables, but here it refers to the fact that once a given night is over it’s gone for ever. For instance, the night of 15 October 2021 can never be sold again.

Detailed explanation-5: -For example, choosing public transportation to travel to a particular destination by foregoing the option of traveling in one’s own car is a good example of opportunity cost, because you end up saving money which needs to be spent on fuel.