Question

The Red Jacket Mountain View Inn in New Hampshire charges $159 per room in the winter ski season and $114 during the summer months. The number of rooms and operating costs are constant year round. These prices indicate

Answer 1

Demand for rooms increases during winters.

Step-by-step explanation:

Price charge by Red Jacket Mountain View Inn during winters = $159 per room.

Price charge by Red Jacket Mountain View Inn during summer = $114 per room.

This difference in the prices of rooms indicates that the demand for rooms increases during winter season as compared to summer season. The high demand for rooms received from the consumers, gives an incentive to the hotel owners to charge higher prices. There is a difference of ($159 - $114) = $45 between the prices in two seasons.

Alternatively, we can say that the demand curve for hotel rooms during winters shift rightwards that's why the Red Jacket Mountain View Inn charges higher prices.