Related to the Economics in Practice on page 77: 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

It is not clear how the demand for hotel rooms will be affected by the increase in the equilibrium price, as some people may be willing to pay the higher price while others may not. Therefore, the demand may have increased, decreased, or stayed the same. Similarly, total revenue may have increased, decreased, or stayed the same, depending on the extent to which the increase in price offsets the decrease in quantity demanded. Therefore, the correct answer is D: may have increased, decreased, or stayed the same; may increase, decrease, or stay the same.

Related to the Economics in Practice on Page 77: If