Question
ABC World Theme Park operates a one of the world's famous theme park and hotel in HK. The own price elasticity of demand for rooms
ABC World Theme Park operates a one of the world's famous theme park and hotel in HK. The own price elasticity of demand for rooms at ABC World Hotel is 3.5. The income elasticity of demand for rooms at ABC World Hotel is 1.8. The cross-price elasticity of demand for rooms at ABC World Hotel with respect to the price of airfare is -0.5. i. If ABC World Theme Park raises its prices by 10 percent, what will be the percentage in occupancy of hotel rooms? ii. If an economic recovery increases income in HK by 4.2%, what will be the percentage change in occupancy of hotel rooms? iii. If airline consolidation raises the price of airfare by 22%, what will be the percentage change in occupancy of hotel rooms?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started