Demand Factor Average American household income Roundtrip airfare from New Orleans (MSY) to Atlantic City (ACY) Room rate at the Mountaineer Hotel and Casino, which is near the Lakes Initial Value $50,000 per year $250 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 Graph Input Tool Market for Lakes's Hotel Rooms Price 350 (Dollars per room) Quantity 150 Demanded (Hotel rooms per night) Demand Factors 200 150 Demand Average Income 50 (Thousands of 100 dollars) 50 Airfare from MSY to 250 ACY (Dollars per 0 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) roundtrip) Room Rate at Mountaineer 200 (Dollars per night) ? For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Lakes is charging $350 per room night. from If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Lakes that hotel rooms at the Lakes are rooms per night to rooms per night. Therefore, the income elasticity of demand is meani If the price of an airline ticket from MSY to ACY were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors remain at t from rooms per night to rooms per night. Because the cr initial values, the quantity of rooms demanded at the Lakes hotel rooms at the Lakes and airline trips between MSY and ACY are price elasticity of demand is Lakes 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 to revenue to Decreasing the price will always have this effect on revenue when Lakes is operating on the portion of i demand curve.
Demand Factor Average American household income Roundtrip airfare from New Orleans (MSY) to Atlantic City (ACY) Room rate at the Mountaineer Hotel and Casino, which is near the Lakes Initial Value $50,000 per year $250 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 Graph Input Tool Market for Lakes's Hotel Rooms Price 350 (Dollars per room) Quantity 150 Demanded (Hotel rooms per night) Demand Factors 200 150 Demand Average Income 50 (Thousands of 100 dollars) 50 Airfare from MSY to 250 ACY (Dollars per 0 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) roundtrip) Room Rate at Mountaineer 200 (Dollars per night) ? For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Lakes is charging $350 per room night. from If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Lakes that hotel rooms at the Lakes are rooms per night to rooms per night. Therefore, the income elasticity of demand is meani If the price of an airline ticket from MSY to ACY were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors remain at t from rooms per night to rooms per night. Because the cr initial values, the quantity of rooms demanded at the Lakes hotel rooms at the Lakes and airline trips between MSY and ACY are price elasticity of demand is Lakes 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 to revenue to Decreasing the price will always have this effect on revenue when Lakes is operating on the portion of i demand curve.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Demand Factor
Average American household income
Roundtrip airfare from New Orleans (MSY) to Atlantic City (ACY)
Room rate at the Mountaineer Hotel and Casino, which is near the Lakes
Initial Value
$50,000 per year
$250 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
Graph Input Tool
Market for Lakes's Hotel Rooms
Price
350
(Dollars per room)
Quantity
150
Demanded
(Hotel rooms per
night)
Demand Factors
200
150
Demand
Average Income
50
(Thousands of
100
dollars)
50
Airfare from MSY to
250
ACY
(Dollars per
0
0 50 100 150 200 250 300 350 400 450 500
QUANTITY (Hotel rooms)
roundtrip)
Room Rate at
Mountaineer
200
(Dollars per night)
?
For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Lakes is charging $350 per room
night.
from
If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the
Lakes
that hotel rooms at the Lakes are
rooms per night to
rooms per night. Therefore, the income elasticity of demand is
meani
If the price of an airline ticket from MSY to ACY were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors remain at t
from
rooms per night to
rooms per night. Because the cr
initial values, the quantity of rooms demanded at the Lakes
hotel rooms at the Lakes and airline trips between MSY and ACY are
price elasticity of demand is
Lakes 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 to
revenue to
Decreasing the price will always have this effect on revenue when Lakes is operating on the
portion of i
demand curve.
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