For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Oceans is charging $400 per room per night. If average household income increases by 10%, from $50,000 to $55,000 per year, the quantity of rooms demanded at the Oceans ▼ from rooms per night. Therefore, the income elasticity of demand is rooms per night to , meaning that hotel rooms at the Oceans are
For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Oceans is charging $400 per room per night. If average household income increases by 10%, from $50,000 to $55,000 per year, the quantity of rooms demanded at the Oceans ▼ from rooms per night. Therefore, the income elasticity of demand is rooms per night to , meaning that hotel rooms at the Oceans are
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text: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
Demand
50 100 150 200 250 300 350 400 450 500
QUANTITY (Hotel rooms)
Graph Input Tool
Market for Oceans's Hotel Rooms
Price
(Dollars per room)
Quantity
Demanded
(Hotel rooms per
night)
Demand Factors
Average Income
(Thousands of
dollars)
Airfare from PIT to
ACY
(Dollars per
roundtrip)
Room Rate at
Meadows
(Dollars per night)
400
100
50
250
200
?

Transcribed Image Text:For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Oceans is charging $400 per room
per night.
If average household income increases by 10%, from $50,000 to $55,000 per year, the quantity of rooms demanded at the Oceans
rooms per night to
rooms per night. Therefore, the income elasticity of demand is
Oceans are
from
meaning that hotel rooms at the
I
IL
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