According to an article in the Wall Street Journal, unlike airlines, even elite hotels don't have sophisticated systems that can react quickly to changes in demand. Even if they could, many hoteliers say people don't respond that much to lower rates
"We've tested this, cutting our rates by $50 [per night], and we didn't see an appreciable response in occupancy," says Jim Schultenover, a vice president for Ritz-Carlton.
Source: Jesse Drucker, "In Times of Belt-Tightening, We Seek Reasonable Rates," Wall Street Journal, April 6, 2001.
Based on the information above, the demand for hotel rooms is
A) perfectly elastic. B) inelastic. C) unit elastic. D) elastic.
B
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Common stock in a corporation represents a(n)
a. loan to the business b. ownership interest in the business c. investment in the business with a guaranteed interest return d. investment in the business with a guaranteed profit return e. gift to the corporation
When will speculators' actions raise social welfare?
a. Always. b. When they drive down market prices. c. When their expectations prove to be correct. d. When they are not risk averse.
Using assumptions to make things simpler and focus attention on what really matters is like using a road map to plan a trip.
Answer the following statement true (T) or false (F)
Market clearing price
A) refers to a movement along the demand curve. B) refers to a supply curve. C) exists at a the point at which quantity demanded equals quantity supplied. D) refers to a surplus.