If Carnival Cruise Lines increased the price of its seven-day cruise package by 10% and, as a result, experienced a 20% decline in customer bookings, Carnival's demand would be
A) steady.
B) inelastic.
C) elastic.
D) prestige.
E) marginal.

Question

Quizplus · Accepted Answer

The 20% decline in customer bookings indicates that customers are sensitive to price changes, meaning their demand is elastic. If the demand was inelastic, customers would still book the cruise despite the 10% price increase.

If Carnival Cruise Lines Increased the Price of Its Seven-Day