Related to the Economics in Practice on page 79: 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 demand for hotel rooms is not directly affected by the hurricane; it's the supply that decreases. The change in demand would depend on other factors (e.g., fewer tourists wanting to visit the area). Total revenue from the sale of hotel rooms could increase (due to higher prices), decrease (if the decrease in quantity demanded is significant), or stay the same (if the effects balance out), hence the correct answer is that demand may have increased, decreased, or stayed the same, and total revenue may increase, decrease, or stay the same.

Related to the Economics in Practice on Page 79: If