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 change? (The supply, or the number of nursing home beds in the area, has not changed during this period.)

Even though, there seem to be a positive correlation between the price of daily rates and occupancy. it doesn't imply that increasing the rates would increase occupancy rates. there might be other factors explaining the decline.

some of these factors include :

1. decline in the number of the aged in the population : if the proportion of the aged in the population has reduced, the nursing home would experience a decline in residents

2. if the quality of care received by patients has also reduced, the aged might prefer other nursing homes.

3. there might be a shift in reference. the aged might prefer to be cared for at home by family and friends instead of staying in a nursing home.

Increase in death rate among the elderly : if there is an increase in mortality rate, the care home would experience a decline in occupancy