9. Application: 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 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 $50,000 per year

Roundtrip airfare from San Francisco (SFO) to Las Vegas (LAS) $250 per roundtrip

Room rate at the Exhilaration Hotel and Casino, which is near the Triple Sevens$200 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

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 ? 500 Market for Triple Sevens's Hotel Rooms 450 Price ( Dollars per room) 350 400 Quantity 150 350 Demanded ( Hotel rooms per 300 night 250 PRICE (Dollars per room) Demand Factors 200 150 Average Income 50 Demand (Thousands of dollars 100 Airfare from SFO to 50 LAS 250 ( Dollars per roundtrip 0 50 100 150 200 250 300 350 400 450 500 Room Rate at 200 Exhilaration QUANTITY (Hotel rooms) ( Dollars per night) For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $350 per room per night. Activate Windows