Hotel managers use marginal cost all the time. As the training manager for Hilton once noted, "We are selling a very perishable product." A hotel room not rented tonight cannot be rented twice tomorrow night.

You are the night manager at the Best-Sleep hotel. You are approached at 10 pm by a traveler looking for a room. The traveler says, "I can only spend $50." The standard rate for your cheapest room is $150. You know the hotel currently has half a dozen empty rooms. Should you rent the room for $50?