Beach resorts raise their prices during the summer months and yet more people book rooms at those times. Is this a violation of the law of demand?
No. During summer months, the demand for beach resort accommodations tends to increase, pushing up both prices and occupancy for the duration. An increase in demand (a shift of the curve. occurs. This does not violate the law of demand, which states that there is an inverse relationship between price and quantity demanded (along the demand curve), all other things being equal.
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For this question, ignore tax considerations of each of the following. Assume that consumption decisions are made according to the permanent income theory. Which of the following would lead to the smallest increase in current consumption?
A) winning $10,000 in the lottery B) inheriting $10,000 from a relative C) obtaining $10,000 by winning a lawsuit D) getting a one-time $10,000 bonus from your employer E) all of the above
A merger wave can be set off
a. by government restrictions that prevent firms from reaching their minimum efficient scale b. if the federal government raises corporate income taxes. c. if the federal government lowers corporate income taxes d. if minimum efficient scale falls e. by some change in a market, such as a shift in market demand.