Question

What will happen as a consequence of the following 2 events occurring and affecting the market for hotels in Acapulco, Mexico

Event #1. Many people planned to go to the beach in Flonda but the hurricane made this impossible, but they insist that they want to go on vacation to another beach area.
Event #2: Mexican hotel workers unionize a successful campaign for higher wages.
A. P ambiguous and Q increases.
B. P ambiguous and Q decreases.
C. P increases and Q ambiguous
D. P decreases and Q ambiguous.

Answer 1

The consequence of the two events on the market for hotels in Acapulco is ambiguous, with an uncertain effect on price and quantity.

Step-by-step explanation:

The consequence of Event #1 and Event #2 on the market for hotels in Acapulco, Mexico would be an ambiguous effect on price (P) and an ambiguous effect on quantity (Q). Event #1, where many people planned to go to the beach in Florida but were unable to due to a hurricane, could potentially increase the demand for hotels in Acapulco as these individuals may look for an alternative beach area for their vacation. On the other hand, Event #2, where Mexican hotel workers unionized for higher wages, could potentially increase the costs of operating hotels in Acapulco, which could then affect hotel prices and potentially decrease the quantity of available hotel rooms.

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