1. Why do demand curves slope down (i.e.,
sales volume usually rises at lower prices)?
2. Why would consumers ever choose
insurance plans with large deductibles?
3. During the last five years average daily
occupancy at Autumn Acres nursing home has slid from 125 to 95 even though
Autumn Acres has cut its daily rate from $125 to $115. Do these data suggest
that occupancy would have been higher if Autumn Acres had raised its rates?
What changes in nonprice demand factors might explain this? (There have been no
changes in supply. The number of nursing home beds in the area has not changed
during this period.)