9. Application: Elasticity and hotel rooms The following graph input tool shows the daily demand for hotel rooms at the Lakes Hotel and Casino in Atlantic City, New Jersey. 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 Pittsburgh (PIT) to Atlantic City (ACY) Room rate at the Mountaineer Hotel and Casino, which is near the Lakes Initial Value $40,000 per year $200 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) 500 450 400 350 300 250 200 150 100 50 0 0 50 Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Graph Input Tool Market for Lakes's Hotel Rooms Price 300 (Dollars per room) Quantity 200 Demanded (Hotel rooms per night) Demand Factors Average Income 40 (Thousands of dollars) Airfare from PIT to 200 ACY (Dollars per roundtrip) Room Rate at 200 Mountaineer (Dollars per night) ?
9. Application: Elasticity and hotel rooms The following graph input tool shows the daily demand for hotel rooms at the Lakes Hotel and Casino in Atlantic City, New Jersey. 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 Pittsburgh (PIT) to Atlantic City (ACY) Room rate at the Mountaineer Hotel and Casino, which is near the Lakes Initial Value $40,000 per year $200 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) 500 450 400 350 300 250 200 150 100 50 0 0 50 Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Graph Input Tool Market for Lakes's Hotel Rooms Price 300 (Dollars per room) Quantity 200 Demanded (Hotel rooms per night) Demand Factors Average Income 40 (Thousands of dollars) Airfare from PIT to 200 ACY (Dollars per roundtrip) Room Rate at 200 Mountaineer (Dollars per night) ?
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 3.6P: (Price Elasticity of Supply) Calculate the price elasticity of supply for each of the following...
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Question
Transcribed Image Text:9. Application: Elasticity and hotel rooms
The following graph input tool shows the daily demand for hotel rooms at the Lakes Hotel and Casino in Atlantic City, New Jersey. 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 Pittsburgh (PIT) to Atlantic City (ACY)
Room rate at the Mountaineer Hotel and Casino, which is near the Lakes
Initial Value
$40,000 per year
$200 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
100
50
0
0
50
Demand
100 150 200 250 300 350 400 450 500
QUANTITY (Hotel rooms)
Graph Input Tool
Market for Lakes's Hotel Rooms
Price
300
(Dollars per room)
Quantity
200
Demanded
(Hotel rooms per
night)
Demand Factors
Average Income
40
(Thousands of
dollars)
Airfare from PIT to
200
ACY
(Dollars per
roundtrip)
Room Rate at
200
Mountaineer
(Dollars per night)
?
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