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. Graph Input Tool (?) Market for Triple Sevens's Hotel Rooms 500 I Price (Dollars per room) 450 200 400 Quantity Demanded (Hotel rooms per night) 300 350 300 250 Demand Factors 200 150 Average Income (Thousands of dollars) Demand 50 100 Airfare from LAX to LAS (Dollars per roundtrip) 50 100 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Room Rate at Exhilaration (Dollars per night) 250 For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $200 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 Triple Sevens |rooms per night to| Triple Sevens are from |rooms per night. Therefore, the income elasticity of demand is , meaning that hotel rooms at the If 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, from , hotel rooms at the Triple Sevens and hotel rooms at the Exhilaration are the quantity of rooms demanded at the Triple Sevens |rooms per night to[ ]rooms per night. Because the cross-price elasticity of demand is Triple Sevens is debating decreasing the price of its rooms to $175 per night. Under the initial demand conditions, you can see that this would cause its total revenue to .. Decreasing the price will always have this effect on revenue when Triple Sevens is operating on the portion of its demand curve. PRICE (Dollars per room)
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. Graph Input Tool (?) Market for Triple Sevens's Hotel Rooms 500 I Price (Dollars per room) 450 200 400 Quantity Demanded (Hotel rooms per night) 300 350 300 250 Demand Factors 200 150 Average Income (Thousands of dollars) Demand 50 100 Airfare from LAX to LAS (Dollars per roundtrip) 50 100 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Room Rate at Exhilaration (Dollars per night) 250 For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $200 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 Triple Sevens |rooms per night to| Triple Sevens are from |rooms per night. Therefore, the income elasticity of demand is , meaning that hotel rooms at the If 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, from , hotel rooms at the Triple Sevens and hotel rooms at the Exhilaration are the quantity of rooms demanded at the Triple Sevens |rooms per night to[ ]rooms per night. Because the cross-price elasticity of demand is Triple Sevens is debating decreasing the price of its rooms to $175 per night. Under the initial demand conditions, you can see that this would cause its total revenue to .. Decreasing the price will always have this effect on revenue when Triple Sevens is operating on the portion of its demand curve. PRICE (Dollars per room)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text: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.
Graph Input Tool
Market for Triple Sevens's Hotel Rooms
500
I Price
(Dollars per room)
450
200
400
Quantity
Demanded
(Hotel rooms per
night)
300
350
300
250
Demand Factors
200
150
Average Income
(Thousands of
dollars)
Demand
50
100
Airfare from LAX to
LAS
(Dollars per
roundtrip)
50
100
+
50 100 150 200 250 300 350 400 450 500
QUANTITY (Hotel rooms)
Room Rate at
Exhilaration
(Dollars per night)
250
For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $200 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 Triple Sevens
from
rooms per night to
rooms per night. Therefore, the income elasticity of demand is
meaning that hotel rooms at the
Triple Sevens are
If 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,
the quantity of rooms demanded at the Triple Sevens
v from
rooms per night to
rooms per night. Because the cross-price
elasticity of demand is
v, hotel rooms at the Triple Sevens and hotel rooms at the Exhilaration are
Triple Sevens is debating decreasing the price of its rooms to $175 per night. Under the initial demand conditions, you can see that this would cause
its total revenue to
Decreasing the price will always have this effect on revenue when Triple Sevens is operating on the
v portion of its demand curve.
PRICE (Dollars per room)
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