According to an article in the Wall Street Journal, unlike airlines, even elite hotels don't have sophisticated systems that can react quickly to changes in demand. Even if they could, many hoteliers say people don't respond that much to lower rates. "We've tested this, cutting our rates by US$50 [per night], and we didn't see an appreciable response in occupancy," says Jim Schultenover, a vice president for Ritz-Carlton. Based on the information above, the demand for hotel rooms
A) is income inelastic.
B) is income elastic.
C) is price inelastic.
D) is price elastic.

Question

Quizplus · Accepted Answer

The demand for hotel rooms is price inelastic because lowering the rates did not significantly increase occupancy, indicating that changes in price have a relatively small effect on the quantity demanded.

According to an Article in the Wall Street Journal, Unlike