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Business
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| Number of pages / Number of words: |
11 / 3027 |
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However it can be seen from the arguments we have considered below that the basic laws of economics are still open to different interpretations for the same circumstances
In the first letter, written by Mr A Latham, it is stated that the London hotel industry is behaving anomalously in increasing their prices when demand falls and that these actions contradict the basic laws of economics...
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On the contrary, Mr Warnes’ letter claims that it is entirely logical to increase prices in this situation, and that those economic laws have little to do with this decision.
Latham claims that “when sales fall, prices are raised, in direct contravention to the basic laws of economicsâ€. These economic laws essentially originate from the demand curve, which illustrates the relationship between the price of the goods and the quantity that can be sold at this price, given constant levels of other determinants, which include factors such as income and substitutions...
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