If the price of motel rooms increases by 10 percent while the prices of other goods and services increase by 5 percent on average, the relative price of motel rooms has:
A)increased.
B)decreased by 5 percent.
C)decreased by 10 percent.
D)remained constant.

Question

If the price of motel rooms increases by 10 percent while the prices of other goods and services increase by 5 percent on average, the relative price of motel rooms has:
A)increased.
B)decreased by 5 percent.
C)decreased by 10 percent.
D)remained constant.

Quizplus · Accepted Answer

In this case, motel rooms prices increased by more than other goods and services so the relative price of motel rooms increased.

If the Price of Motel Rooms Increases by 10 Percent While