Attempts: 9. Application: Elasticity and hotel rooms The following graph input t
ID: 1134021 • Letter: A
Question
Attempts: 9. Application: Elasticity and hotel rooms The following graph input tool shows the daily demand for hotel rooms at the Peacock Hotel and Casino in Las Average: /3 Vegas, Nevada. To help the hotel management better understand the market, an economist identified three primary factors that affect the demand for rooms each 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 San Francisco (SFO) to Las Vegas (LAS) Room rate at the Grandiose Hotel and Casino, which is near the Peacock Initial Value $50,000 per year $100 per roundtrip $250 per night Use the graph input tool to help you answer the following questions, You wil 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 Peacock's Hotel Rooms 500 Price (Dollars per room) 200 400 350 t 300 300 Hotel rooms per night) ab tell me about y docx.. MUS 189IC-De docx A Rubiks cube.xlsxExplanation / Answer
Answer:
The second link you have posted if not opening.
There are three factors affecting the demand: Income, airline price and tariff per room
If you change your inputs in graph secttion and with income increase the demand increases(postive income elasticty), then hotel room is normal good but if demand decreases(negative elasticity) with increase in income then it is inferior good.
If with airfare price increase demand decreases, then it has negative elasticty and hence compliment good.
If with airfare price increase demand increases then they are substitutes with postive cross price elasticity.
If with decrease in price the total revenue increases then the demand is elastic.
If with decrease in price the total revenue falls then the demand is inelastic.
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