9. Application - Elasticity and hotel rooms 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 hote management better understand the market, an economist identified three primary factors that affect the demand for rooms each night. These dem 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 Canadian household income Roundtrip airfare from Toronto (YYZ) to Las Vegas (LAS) Room rate at the Exhilaration Hotel and Casino, which is near the Triple Sevens Initial Value $40,000 per year $100 per roundtrip $200 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. PRICE (Dollars per room) 500 450 400 350 300 250 200 150 Graph Input Tool Market for Triple Sevens's Hotel Rooms Price 150 (Dollars per room) Quantity 350 Demanded (Hotel rooms per night) Demand Factors Demand Average Income 40 (Thousands of 100 dollars) 50 Airfare from YYZ to 100 LAS (Dollars per 0 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) roundtrip) Room Rate at Exhilaration (Dollars per night) 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 $150 room per night. If average household income increases by 25%, from $40,000 to $50,000 per year, the quantity of rooms demanded at the Triple from rooms per night to Sevens hotel rooms at the Triple Sevens are rooms per night. Therefore, the income elasticity of demand is good. meaning If the price of a room at the Exhilaration were to decrease by 20%, from $200 to $160, while all other demand factors remain at their initial val rooms per night. Because the cross-price the quantity of rooms demanded at the Triple Sevens elasticity of demand is from rooms per night to hotel rooms at the Triple Sevens and hotel rooms at the Exhilaration are con that this would d