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, a vice president for Ritz....based on the information above the demand for hotel rooms
a. is income elastic
b. is income inelastic
c. is price elastic
d. is price inelastic

Question

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, a vice president for Ritz....based on the information above the demand for hotel rooms
a. is income elastic
b. is income inelastic
c. is price elastic
d. is price inelastic

anonymous · Answer

I think its d. (price inelastic)

anonymous · Answer

d.) price inelastic. no change in demand when price has changed shows 0 correlation between demand and price.