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.

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Definitions:

Tax-transfer System

The governmental mechanism by which taxes are collected from individuals and businesses, and redistributed through spending programs, often targeting social welfare and public services.

Progressive

Relating to or advocating for progress, change, or improvement, as opposed to wishing to maintain the status quo.

Proportional

Corresponding in size or amount to something else; having a constant relation in degree or number.

Bimodal

Characterized by or having two distinct modes or peaks in a distribution or set of data.