As the effects of COVID-19 spread across the entire world, the primary focus for governments and businesses is the safety of their people. Strategies to flatten the COVID-19 curve such as community lockdowns, social distancing, stay-at-home orders, travel, and mobility restrictions have significantly decreased the demand for many hospitality businesses. The hotel industry is a subdivision of the hospitality industry specializing in accommodation and is one of the most affected markets by the COVID-19.
a. Identify the market structure that best describes the hotel market and use examples to describe its key features.
b. Assuming this market was in long-run equilibrium before the outbreak of COVID-19, use Microeconomics theories to analyze how the COVID-19 would affect this market in the short run and in the long run.
