The following graph input tool shows the daily demand for hotel rooms at the Triple Sevens...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following graph input tool shows the daily demand for hotel rooms at the Triple Sevens Hotel and Casino in Las Vegas, Nevada. To help the hotel management better understand the market, an economist identified three primary factors that affect the demand for rooms each night. These demand factors, along with the values corresponding to the initial demand curve, are shown in the following table and alongside the graph input tool. Demand Factor Initial Value Average American household income $50,000 per year Roundtrip airfare from New York (JFK) to Las Vegas (LAS) $200 per roundtrip Room rate at the Exhilaration Hotel and Casino, which is near the Triple Sevens $250 per night Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Triple Sevens's Hotel Rooms 500 I Price (Dollars per room) 450 300 400 Quantity Demanded (Hotel rooms per night) 200 350 300 250 Demand Factors 200 150 Average Income (Thousands of dollars) Demand 50 100 Airfare from JFK to LAS (Dollars per roundtrip) 50 200 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Room Rate at Exhilaration (Dollars per night) 250 PRIČE (Dollars per room) For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $300 per room per night. If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Triple Sevens v from rooms per night to rooms per night. Therefore, the income elasticity of demand is , meaning that hotel rooms at the Triple Sevens are If the price of an airline ticket from JFK to LAS were to increase by 10%, from $200 to $220 roundtrip, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Triple Sevens v from rooms per night to rooms per night. Because the cross-price elasticity of demand is v, hotel rooms at the Triple Sevens and airline trips between JFK and LAS are Triple Sevens is debating decreasing the price of its rooms to $275 per night. Under the initial demand conditions, you can see that this would cause its total revenue to v. Decreasing the price will always have this effect on revenue when Triple Sevens is operating on the portion of its demand curve. The following graph input tool shows the daily demand for hotel rooms at the Triple Sevens Hotel and Casino in Las Vegas, Nevada. To help the hotel management better understand the market, an economist identified three primary factors that affect the demand for rooms each night. These demand factors, along with the values corresponding to the initial demand curve, are shown in the following table and alongside the graph input tool. Demand Factor Initial Value Average American household income $50,000 per year Roundtrip airfare from New York (JFK) to Las Vegas (LAS) $200 per roundtrip Room rate at the Exhilaration Hotel and Casino, which is near the Triple Sevens $250 per night Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Triple Sevens's Hotel Rooms 500 I Price (Dollars per room) 450 300 400 Quantity Demanded (Hotel rooms per night) 200 350 300 250 Demand Factors 200 150 Average Income (Thousands of dollars) Demand 50 100 Airfare from JFK to LAS (Dollars per roundtrip) 50 200 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Room Rate at Exhilaration (Dollars per night) 250 PRIČE (Dollars per room) For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $300 per room per night. If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Triple Sevens v from rooms per night to rooms per night. Therefore, the income elasticity of demand is , meaning that hotel rooms at the Triple Sevens are If the price of an airline ticket from JFK to LAS were to increase by 10%, from $200 to $220 roundtrip, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Triple Sevens v from rooms per night to rooms per night. Because the cross-price elasticity of demand is v, hotel rooms at the Triple Sevens and airline trips between JFK and LAS are Triple Sevens is debating decreasing the price of its rooms to $275 per night. Under the initial demand conditions, you can see that this would cause its total revenue to v. Decreasing the price will always have this effect on revenue when Triple Sevens is operating on the portion of its demand curve.
Expert Answer:
Answer rating: 100% (QA)
1 When average houshold income increases by 20 the quantity of rooms demanded increases from 200 roo... View the full answer
Related Book For
Posted Date:
Students also viewed these economics questions
-
The following graph input tool shows the daily demand for hotel rooms at the Peacock Hotel and Casino in Las Vegas, Nevada. To help the hotel management better understand the market, an economist...
-
The graph below shows the daily demand for entry into the downtown core of a major city by commuter vehicles and shoppers' vehicles if they were required to pay a special traffic fee in order to...
-
Aladdin Gaming runs a casino in Las Vegas that was the target of a unionization effort. During a lunch break in the employee dining room, union organizers approached people who worked in the dining...
-
Debate on Causes of Unemployment Two economists are debating the cause of a high unemployment rate. One economist argues that there is not enough government spending. The other says high unemployment...
-
Determine: (a) the energy () of air at 150oC, 50 kPa in a 2m3 storage tank. (b) What-if Scenario: What would the energy be if the tank were filled with steam instead?
-
The information below pertains to Barkley Company for 2021. Net income for the...
-
Consider the stock of Examples 14.3 and 14.4, which has \(\sigma=.20\) and an initial price of \(\$ 62\). The interest rate is \(10 \%\), compounded monthly. Consider a 5-month option with a strike...
-
The following data pertain to the Aquarius Hotel Supply Company for the year just ended. Budgeted sales revenue.................................................................$945,000 Budgeted...
-
Tracy has been hired to review a manufacturing company's workforce to document the necessary responsibilities of each role within the company, regardless of who is currently working at the company....
-
V, K and G are partners in VKG Partnership. Their profit ratio is 5:3:2 while their original capital interest ratio is 4:4:2. On July 1, 2015, P was admitted by the partnership for 20% interest in...
-
Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts. The direct material cost is $95 and each ceiling fan requires 2.5...
-
With regard to the net present value (NPV) profiles of two projects, the crossover rate is best described as the discount rate at which: A. two projects have the same NPV. B. two projects have the...
-
What are the key differences between traditional and ABC?
-
What is the primary purpose of managerial accounting information?
-
Briefly describe the coding systems for diseases (diagnoses) and procedures.
-
State the relation in Exercise 19 in mathematical form. Exercise 19 The more candy bars you add to your diet per day, the more weight you gain (all other factors, such as the amount of exercise you...
-
Take into consideration Corporate Social Responsibility (CSR), what provisions have the International Labour Law motion to put into consideration to its members? What is the importance OF CSR in our...
-
Cobb Manufacturing Company uses a process cost system and average costing. The following production data is for the month of June 2011. Production Costs Work in process, beginning of the month:...
-
In a Harris Interactive survey, 2303 adults were asked whether they believe in five different things, and the accompanying table summarizes the results. Does this table describe a relative frequency...
-
A statistics student plans to use a TI-84 Plus calculator on her final exam. From past experience, she estimates that there is 0.92 probability that the calculator will work on any given day. Because...
-
In the sign test procedure described in this section, we exclude ties. A second approach is to treat half of the 0s as positive signs and half as negative signs. With a third approach, in two-tailed...
-
Determine the probability mass function of \(X\) from the following cumulative distribution function: \[ F(x)=\left\{\begin{array}{lr} 0 & x. \] Figure 3.3 displays a plot of \(F(x)\). From the plot,...
-
Two new product designs are to be compared on the basis of revenue potential. Marketing believes that the revenue from design A can be predicted quite accurately to be \(\$ 3\) million. The revenue...
-
The probability that a wafer contains a large particle of contamination is 0.01. If it is assumed that the wafers are independent, what is the probability that exactly 125 wafers need to be analyzed...
Study smarter with the SolutionInn App