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Posts: 85
3 weeks ago
An article on how hotel prices rose during the solar eclipse on August 21, 2017 noted that in Hopkinsville, Kentucky: "At the local La Quinta Inn & Suites, prices are $425 a night, up from a $93 average on Google for the weekend before."
Source: David Gernon, "Once-in-a-lifetime solar eclipse is a bonanza for hotels, airlines," cnbc.com, July 27, 2017.

Which of the following statements is true?

• The La Quinta Inn & Suites is practicing first-degree price discrimination by charging what the market will bear.

• This is evidence of third-degree price discrimination because hotel accommodation on a particular day is not a product that can be resold later.

• There is no evidence of price discrimination; the La Quinta Inn & Suites is responding to increased demand for hotel rooms in the face of constant supply.

• The La Quinta Inn & Suites has adopted this pricing strategy to capitalize on arbitrage profits.
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Microeconomics
Edition: 7th
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Posts: 77
3 weeks ago
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There is no evidence of price discrimination; the La Quinta Inn & Suites is responding to increased demand for hotel rooms in the face of constant supply.
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3 weeks ago
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