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Economics: The Basics 1st Edition by Mike Mandel
Edition 1ISBN: 978-0071316026Economics: The Basics 1st Edition by Mike Mandel
Edition 1ISBN: 978-0071316026 Exercise 6
In a shorefront tourist town, a hurricane washes away the beach. All of the town's hotels, however, are still intact.
a) Does the supply curve for hotel rooms shift to the left, shift to the right, or stay in the same place? Explain your answer.
b) Does the demand curve for hotel rooms shift to the left, shift to the right, or stay in the same place? Explain your answer.
c) After the hurricane, what happens to the equilibrium price and quantity of hotel rooms?
d) Suppose the neighboring town still has its beach. After the hurricane, what happens to the market for hotel rooms in that town?
a) Does the supply curve for hotel rooms shift to the left, shift to the right, or stay in the same place? Explain your answer.
b) Does the demand curve for hotel rooms shift to the left, shift to the right, or stay in the same place? Explain your answer.
c) After the hurricane, what happens to the equilibrium price and quantity of hotel rooms?
d) Suppose the neighboring town still has its beach. After the hurricane, what happens to the market for hotel rooms in that town?
Explanation
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Supply curve:
The supply curve is the r...
Economics: The Basics 1st Edition by Mike Mandel
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