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) perfectly elastic. B) inelastic. C) unit elastic. D) elastic.
B
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If the MPC = 3/4, an increase in government purchases of $40 billion will ultimately lead to:
a. a $160 billion increase in aggregate demand. b. a $40 billion increase in aggregate demand. c. a $30 billion increase in aggregate demand. d. a $30 billion decrease in aggregate demand.
The Buy America Act of 1933 mandates that
A. household consumers buying more of local products will be given suitable tax incentives. B. the sales taxes on goods manufactured by the local labor force must be lower than the sales taxes on goods manufactured by immigrant workers. C. purchases funded by the U.S. government must favor domestic products. D. durable goods produced locally must be priced lower than comparable imported goods.