If you could please help me understand how to use the given information to solve this problem, that would be greatly appreciated! Thanks! 8. Application: Elasticity and hotel roomsThe 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 hotelmanagement better understand the market, an economist identified three primary factors that affect the demand for rooms each night. These demandfactors, along with the values corresponding to the initial demand curve, are shown in the following table and alongside the graph input tool.Demand FactorInitial ValueAverage American household income$50,000 per yearRoundtrip airfare from New York (JFK) to Las Vegas (LAS)$100 per roundtripRoom rate at the Exhilaration Hotel and Casino, which is near the Triple Sevens$250 per nightUse 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 Rooms500450I Price(Dollars per room)200400QuantityDemanded(Hotel rooms pernight)300350300250Demand Factors200150 +DemandAverage Income(Thousands ofdollars)50100 +50Airfare from JFK toLAS(Dollars perroundtrip)10050 100 150 200 250 300 350 400 450 500QUANTITY (Hotel rooms)Room Rate atExhilaration(Dollars per night)250For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $200 perroom per night.If average household income increases by 10%, from $50,000 to $55,000 per year, the quantity of rooms demanded at the Triple Sevensv fromrooms per night torooms per night. Therefore, the income elasticity of demand is, meaning thathotel rooms at the Triple Sevens areIf the price of a room at the Exhilaration were to decrease by 10%, from $250 to $225, while all other demand factors remain at their initial values,▼ fromZ , hotel rooms at the Triple Sevens and hotel rooms at the Exhilaration arethe quantity of rooms demanded at the Triple Sevens|rooms per night to|rooms per night. Because the cross-priceelasticity of demand isTriple Sevens is debating decreasing the price of its rooms to $175 per night. Under the initial demand conditions, you can see that this would causeits total revenue toDecreasing the price will always have this effect on revenue when Triple Sevens is operating on thev portion of its demand curve.PRICE (Dollars per room)

* Answer: 1. If the average household's income increases by 10% from $50000 to $55000, the…

ooms e daily demand for hotel rooms at the Triple Sevens Hotel and Casino in Las Vegas, Nevada. To help the ket, an economist identified three primary factors that affect the demand for rooms each night. These o ding to the initial demand curve, are shown in the following table and alongside the graph input tool. Initial Value ncome $50,000 per year rk (JFK) to Las Vegas (LAS) $100 per roundtrip Hotel and Casino, which is near the Triple Sevens $250 per night

ooms e daily demand for hotel rooms at the Triple Sevens Hotel and Casino in Las Vegas, Nevada. To help the ket, an economist identified three primary factors that affect the demand for rooms each night. These o ding to the initial demand curve, are shown in the following table and alongside the graph input tool. Initial Value ncome $50,000 per year rk (JFK) to Las Vegas (LAS) $100 per roundtrip Hotel and Casino, which is near the Triple Sevens $250 per night

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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