9. Application: Elasticity and hotel roomsThe following graph input tool shows the dally demand for hotel rooms at the Peacock 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 intial demand curve, are shown in the following table and alongside the graph input toolInitial ValueDemand Factor$50,000 per yearAverage American household inceme$250 per roundtripRoundtrip alrfare from New Yerk (3FK) to Las Vegas (LAS)$200 per nightRoom rate at the Grandiose Hotel and Casino, which is near the PeacockUse the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graphNote Once you enter a value in a white feld, the graph and any corresponding amounts in each grey feld will change accordinglyGraph Input ToolMarket for Peacock's Hotel RoomsPce(Deliars per reom)350guanttyDemanded(otel rooms perDemand Factors200Averase Income110Average Income(Thouands ofdollars)berand50100Airfare from JFK toLAS(Dollars perreundtre)50250100 150 200 20 100 Me 400 450 00Room Rate atGrandiose(Delars per night)QUANTITY (Hetel rooms)200For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Peaceck arging $350 per roomper night.If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Peaceckrooms per night. Therefore, the income elasticity of demand isfromrooms per night tomeaning that hotel reome at thePeacock areIf the price of an airline ticket from rk to LAS were to increase by 20%, from $250 to $300 roundtrie, whle all other demand factors remain at theirreoms per night. Because the cresspriceinitial values, the quantity of reoms demanded at the Peaceck fromreoms per nightselasticity of demand ishotel reoms at the Peaceck and atine trips between K and LAS arePeacock is debating decreasing the price of its rooms to $325 per night. Under the initial demand conditions, you can see that this would cause itsportiontotal revenue toDecreasing the price will always have this effect on revenue when Peacock is operating on theof its demand curve

Hi! thanks for the questions but as per the guidelines, we can answer up to 3 subparts at one time.…

The following graph input tool shows the dally demand for hotel rooms at the Peacock Hotel and Casino in Las Vegas, Nevada. To help the hotel management better understand the market, an econemist identifed three primary factors that affect the demand for rooms each night. These demand factors, along with the values corresponding to the intial demand curve, are shown in the following table and alongside the graph input tool Initial Value Demand Factor $50,000 per year Average American household income $250 per roundtrip Roundtrip airfare from New Yerk (FK) te Las Vegas (LAS) Room rate at the Grandiese Hetel and Casino, which is near the Peacock $200 per night

The following graph input tool shows the dally demand for hotel rooms at the Peacock Hotel and Casino in Las Vegas, Nevada. To help the hotel management better understand the market, an econemist identifed three primary factors that affect the demand for rooms each night. These demand factors, along with the values corresponding to the intial demand curve, are shown in the following table and alongside the graph input tool Initial Value Demand Factor $50,000 per year Average American household income $250 per roundtrip Roundtrip airfare from New Yerk (FK) te Las Vegas (LAS) Room rate at the Grandiese Hetel and Casino, which is near the Peacock $200 per night

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...

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