Asked by Subash Dahal on Apr 27, 2024
Verified
Related to the Economics in Practice on page 79: If a hurricane results in the supply of hotel rooms decreasing and the equilibrium price for hotel rooms increases, the demand for hotel rooms ________ and total revenue from the sale of hotel rooms ________.
A) has decreased; will decrease
B) has decreased; may increase, decrease, or stay the same
C) may have increased, decreased, or stayed the same; will decrease
D) may have increased, decreased, or stayed the same; may increase, decrease, or stay the same
Equilibrium Price
The price at which the quantity of a good demanded equals the quantity supplied, leading to market balance.
Total Revenue
The total amount of money a firm receives from selling its goods or services.
Hotel Rooms
Accommodation units provided by hotels for temporary occupancy by guests, varying in size, quality, and amenities offered.
- Evaluate the influence of market forces on pricing strategies and the allocation of resources.
Verified Answer
AU
Alexis U AnosikeMay 01, 2024
Final Answer :
D
Explanation :
The demand for hotel rooms is not directly affected by the hurricane; it's the supply that decreases. The change in demand would depend on other factors (e.g., fewer tourists wanting to visit the area). Total revenue from the sale of hotel rooms could increase (due to higher prices), decrease (if the decrease in quantity demanded is significant), or stay the same (if the effects balance out), hence the correct answer is that demand may have increased, decreased, or stayed the same, and total revenue may increase, decrease, or stay the same.
Learning Objectives
- Evaluate the influence of market forces on pricing strategies and the allocation of resources.
Related questions
Related to the Economics in Practice on Page 79: If ...
People Scalping Tickets for a Rock Concert Can Sell Their ...
All of the Following Statements Describe a Market Economy Except ...
Define a Market and Describe Some of Its Characteristics
(Figure: Demand and Supply of Gasoline)Use Figure: Demand and Supply ...