Question

Suppose that summer in a resort town is very rainy. we can expect demand to shift _____ and the equilibrium price for hotels to _____.

Answer 1

If the summer in a resort town is very rainy we can expect demand to shift left and the equilibrium price for hotels to fall. Decreases in demand are shown by a shift to the left in the demand curve. If the supply decreases but demand holds steady, the equilibrium price increases but the quantity falls. If in summer rains than it is expected less tourists to visit the city and that is why the demand will be shifted left.