Question

When the weather turns warm in new England every summer the price of hotel rooms in carribbean resort plummets

Answer 1

When the weather turns warm in new England every summer the price of hotel rooms in carribbean resort plummets.This is due to a decrease in hotel demand in Caribbean destinations, while hotel supply remains unchanged.As a result the demand curve shifts to the left. Thus, in the summer, the equilibrium price of Caribbean hotel rooms is lower than in the winter.