Homework Help is Here – Start Your Trial Now!
Business
Economics
The following graph input tool shows the daily demand for hotel rooms at the Big Winner Hotel and Casino in Las Vegas, Nevada. 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 Initial Value Average American household income $40,000 per year Roundtrip airfare from San Francisco (SFO) to Las Vegas (LAS) $250 per roundtrip Room rate at the Lucky Hotel and Casino, which is near the Big Winner $250 per night

The following graph input tool shows the daily demand for hotel rooms at the Big Winner Hotel and Casino in Las Vegas, Nevada. 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 Initial Value Average American household income $40,000 per year Roundtrip airfare from San Francisco (SFO) to Las Vegas (LAS) $250 per roundtrip Room rate at the Lucky Hotel and Casino, which is near the Big Winner $250 per night

ECON MICRO
ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
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...
See similar textbooks
icon
Related questions
Question

If you could hlep me understand how to work through these fill-in-the blanks, that would be great! In particular, I keep getting the # of rooms per night incorrect for each of the paragraphs. Thanks!

8. Application: Elasticity and hotel rooms The following graph input tool shows the daily demand for hotel rooms at the Big Winner Hotel and Casino in Las Vegas, Nevada. 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 Initial Value Average American household income $40,000 per year Roundtrip airfare from San Francisco (SFO) to Las Vegas (LAS) $250 per roundtrip Room rate at the Lucky Hotel and Casino, which is near the Big Winner $250 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. Graph Input Tool (?) Market for Big Winner's Hotel Rooms 500 450 I Price (Dollars per room) 150 400 Quantity Demanded (Hotel rooms per night) 350 350 300 250 Demand Factors 200 150 Demand Average Income (Thousands of dollars) 40 100 50 Airfare from SFO to LAS (Dollars per roundtrip) 250 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Room Rate at Lucky (Dollars per night) 250 PRICE (Dollars per room)
Transcribed Image Text:8. Application: Elasticity and hotel rooms The following graph input tool shows the daily demand for hotel rooms at the Big Winner Hotel and Casino in Las Vegas, Nevada. 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 Initial Value Average American household income $40,000 per year Roundtrip airfare from San Francisco (SFO) to Las Vegas (LAS) $250 per roundtrip Room rate at the Lucky Hotel and Casino, which is near the Big Winner $250 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. Graph Input Tool (?) Market for Big Winner's Hotel Rooms 500 450 I Price (Dollars per room) 150 400 Quantity Demanded (Hotel rooms per night) 350 350 300 250 Demand Factors 200 150 Demand Average Income (Thousands of dollars) 40 100 50 Airfare from SFO to LAS (Dollars per roundtrip) 250 50 100 150 200 250 300 350 400 450 500 QUANTITY (Hotel rooms) Room Rate at Lucky (Dollars per night) 250 PRICE (Dollars per room)
For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Big Winner is charging $150 per room per night. If average household income increases by 50%, from $40,000 to $60,000 per year, the quantity of rooms demanded at the Big Winner from rooms per night to rooms per night. Therefore, the income elasticity of demand is meaning that hotel rooms at the Big Winner are If the price of an airline ticket from SFO to LAS were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Big Winner from rooms per night to rooms per night. Because the cross- price elasticity of demand is , hotel rooms at the Big Winner and airline trips between SFO and LAS are Big Winner is debating decreasing the price of its rooms to $125 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 Big Winner is operating on the portion of its demand curve.
Transcribed Image Text:For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Big Winner is charging $150 per room per night. If average household income increases by 50%, from $40,000 to $60,000 per year, the quantity of rooms demanded at the Big Winner from rooms per night to rooms per night. Therefore, the income elasticity of demand is meaning that hotel rooms at the Big Winner are If the price of an airline ticket from SFO to LAS were to increase by 20%, from $250 to $300 roundtrip, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Big Winner from rooms per night to rooms per night. Because the cross- price elasticity of demand is , hotel rooms at the Big Winner and airline trips between SFO and LAS are Big Winner is debating decreasing the price of its rooms to $125 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 Big Winner is operating on the portion of its demand curve.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cost Function
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
ECON MICRO
ECON MICRO
Economics
ISBN:
9781337000536
Author:
William A. McEachern
Publisher:
Cengage Learning
Managerial Economics: Applications, Strategies an…
Managerial Economics: Applications, Strategies an…
Economics
ISBN:
9781305506381
Author:
James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:
Cengage Learning
Microeconomics A Contemporary Intro
Microeconomics A Contemporary Intro
Economics
ISBN:
9781285635101
Author:
MCEACHERN
Publisher:
Cengage
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS