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 $50 [per night], and we didn't see an appreciable response in occupancy," says Jim Schultenover, a vice president for Ritz-Carlton.
Source: Jesse Drucker, "In Times of Belt-Tightening, We Seek Reasonable Rates," Wall Street Journal, April 6, 2001.
Based on the information above, the demand for hotel rooms is
A)elastic.
B)unit elastic.
C)inelastic.
D)perfectly elastic.

Question

Quizplus · Accepted Answer

The article suggests that even when hotels lower their rates by a significant amount ($50 per night), there is little to no change in occupancy rates. This indicates that the demand for hotel rooms is inelastic, meaning that changes in price have little effect on the quantity of rooms demanded by consumers.

According to an Article in the Wall Street Journal, Unlike