2|}. Appllcatlon: Elasticity and hotel rooms The following graph Input tool shows the daily demand for hotel rooms at the Triple Sevens Hotel and Casino In Las Vegas, Nevada. To help the hotel management better understand the market, an economist Identied three primary factors that affect the demand for rooms each night. Thue demand factors, along with the value corresponding to the initial demand curve, are shown In ihe following table and alongside the graph Input tool. Demand Factor Inial Value Like the graph input that to help you answer the falloudng questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value In a white eld, the graph and any corresponding amounts In each grey eld will change accordingly. Graph Input Tool 500 Market for Triple Sevens's Hotel Rooms 450 Price 300 ( Dollars per room) 400 Quantity 200 350 Demanded (Hotel rooms per 300 night) 250 PRICE (Dollars per room) 200 Demand Factors 150 Demand Average Income 40 (Thousands of 100 dollars) 50 Airfare from LAX to 100 LAS 0 ( Dollars per 0 50 100 150 200 250 300 350 400 450 500 roundtrip) QUANTITY (Hotel rooms) Room Rate at 250 Exhilaration (Dollars per night)For each of the following scenarios, begin by assuming that all demand factors are set to their original valua and Triple Sevens is charging $300 per room per night. If average household income increases by 25%, from $40,000 to $50,000 per year, the quantity of rooms demanded at the Triple Sevens V From rooms per night to rooms per night. Therefore, 1e inoome elasticity of demand is V , meaning mat hotel rooms at the Triple Sevens are V . If the pride of a room at the Exhilaration were to decrease by 20%, From $250 to $200, while all other demand factors remain at their initial values, the quantity of rooms demanded at H1e Triple Sevens V from rooms per night to rooms per night. Because the cross-pride elascity of demand is V , hotel rooms at the Triple Sevens and hotel rooms at the Exhilaration are V . Triple Sevens is debating decreasing Hie pride of its rooms to $2?5 per night. Under Hie initial demand conditions, you can see mat this would cause its total revenue to V . Decreasing the pride will always have this effect on revenue when Triple Sevens is operating on the V portion of its demand curve