The following graph input tool shows the daily demand for hotel rooms at the Triple Sevens...
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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 Average American household income Roundtrip airfare from San Francisco (SFO) to Las Vegas (LAS) Room rate at the Exhilaration Hotel and Casino, which is near the Triple Sevens 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. you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Note: Once PRICE (Dollars per room) is 500 450 400 350 250 200 150 100 50 0 0 X 50 Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Graph Input Tool Market for Triple Sevens's Hotel Rooms Price (Dollars per room) Quantity Demanded (Hotel rooms per night) Demand Factors Average Income (Thousands of dollars) Airfare from SFO to LAS (Dollars per roundtrip) Room Rate at Exhilaration (Dollars per night) Initial Value $50,000 per year $250 per roundtrip $200 per night 350 150 50 250 200 ? For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $350 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 rooms per night to rooms per night. Therefore, the income elasticity of demand from , meaning that hotel rooms at the Triple Sevens are. If the price of an airline ticket from SFO to LAS were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Triple Sevens from rooms per night to ▼ 7 hotel rooms at the Triple Sevens and rooms per night. Because the cross-price elasticity of demand is airline trips between SFO and LAS are ▼. Triple Sevens is debating decreasing the price of its rooms to $325 per night. Under the initial demand conditions, you can see that this would cause its total revenue to ▼ . Decreasing the price will always have this effect on revenue when Triple portion of its demand curve. Sevens is operating on the 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 Average American household income Roundtrip airfare from San Francisco (SFO) to Las Vegas (LAS) Room rate at the Exhilaration Hotel and Casino, which is near the Triple Sevens 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. you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Note: Once PRICE (Dollars per room) is 500 450 400 350 250 200 150 100 50 0 0 X 50 Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Graph Input Tool Market for Triple Sevens's Hotel Rooms Price (Dollars per room) Quantity Demanded (Hotel rooms per night) Demand Factors Average Income (Thousands of dollars) Airfare from SFO to LAS (Dollars per roundtrip) Room Rate at Exhilaration (Dollars per night) Initial Value $50,000 per year $250 per roundtrip $200 per night 350 150 50 250 200 ? For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $350 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 rooms per night to rooms per night. Therefore, the income elasticity of demand from , meaning that hotel rooms at the Triple Sevens are. If the price of an airline ticket from SFO to LAS were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Triple Sevens from rooms per night to ▼ 7 hotel rooms at the Triple Sevens and rooms per night. Because the cross-price elasticity of demand is airline trips between SFO and LAS are ▼. Triple Sevens is debating decreasing the price of its rooms to $325 per night. Under the initial demand conditions, you can see that this would cause its total revenue to ▼ . Decreasing the price will always have this effect on revenue when Triple portion of its demand curve. Sevens is operating on the
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If average household income increases by 50 from 40000 to 60000 per year the quantity of rooms demanded at the Triple Sevens rises from 150 rooms per ... View the full answer
Related Book For
Accounting Principles Part 3
ISBN: 978-1118306802
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
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