Related to the Economics in Practice on p.82: 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 decrease in supply leads to an increase in equilibrium price, which may lead to a decrease, increase, or stay the same for the demand of hotel rooms. Total revenue from the sale of hotel rooms may also increase, decrease, or stay the same depending on how much the increase in price affects the quantity demanded. Therefore, the best choice is D as it correctly reflects the uncertainty of the changes in demand and total revenue.

Related to the Economics in Practice on P