Assume That You Own a Small Boutique Hotel

question 210

Multiple Choice

Assume that you own a small boutique hotel.In an attempt to raise revenue, you reduce your rates by 20 percent.However, your revenue falls.What does this indicate about the demand for your boutique hotel rooms?

• A)Boutique hotel rooms are inferior goods.
• B)Demand is inelastic.
• C)The demand curve for your hotel rooms is vertical.
• D)Demand is elastic.

---

Definitions:

Periodic Inventory

An inventory accounting system where inventory and cost of goods sold are determined at the end of an accounting period based on a physical count.

Defaulted Note

A note or loan for which the borrower has failed to make the agreed-upon payments by the due date.

Account

An accounting device used in bookkeeping to record increases and decreases of business transactions relating to individual assets, liabilities, capital, withdrawals, revenue, expenses, and so on.

Discounting Note Receivable

The process of reducing the value of a note receivable to reflect its current worth by applying an interest rate.