Related to the Economics in Practice on page 82: 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

Question

Quizplus · Accepted Answer

The decrease in supply resulting from the hurricane may cause the demand for hotel rooms to increase if there are still a large number of people seeking accommodation. However, the total revenue from the sale of hotel rooms could either increase, decrease, or stay the same depending on the magnitude of the increase in price and the responsiveness of demand to the price increase. Therefore, the correct answer is D, which acknowledges that the demand and total revenue could have changed in any direction.

Related to the Economics in Practice on Page 82: If