French Quarter Inns drops the price of a suite from $225 to $195 per night and experiences a reduction in the quantity of rooms demanded of an average of five per night. This is an indication that suites at this hotel are apparently an example of a(n) ____ product.
A) reverse-demand
B) inferior
C) standard
D) secondary-demand
E) prestige

Question

Quizplus · Accepted Answer

When the price of a product decreases and the demand for it also decreases, it indicates that the product is a prestige product. People may perceive it as less desirable or exclusive when its price is lower.

French Quarter Inns Drops the Price of a Suite from $225