Question

Consider the market for tourist or vacation hotel and motel rooms in the vicinity of Disneyland (in Anaheim, California), a normal good. Assume this market is approximately perfectly competitive. What happens if the airfare of flights into Southern California rises

Answer 1

A. There’s a decrease in demand

Step-by-step explanation:

here are the options to this question :

A. There’s a decrease in demand

B. There’s an increase in demand

C. There’s an increase in supply

D. There’s a decrease in supply

A perfect competition is characterised by many buyers and sellers of homogeneous goods and services. Market prices are set by the forces of demand and supply.

A normal good is a good whose demand increases when income rises and falls when income falls.

if the airfare of flights into Southern California rises, it would become more expensive for people to book flights. As a result, less people would book flights and less people would travel for vacation and less people would occupy vacation hotel and motel rooms in the vicinity of Disneyland. so, the demand for vacation hotel and motel rooms in the vicinity of Disneyland would fall.