Homework (Ch 05) 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. PRICE (Dollars per room) 500 450 400 350 300 Graph Input Tool Market for Big Winner's Hotel Rooms Price 200 (Dollars per room) Quantity 300 Demanded (Hotel rooms per night) 250 200 150 100 Demand Factors Demand Average Income 50 (Thousands of 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 Lucky (Dollars per night) 250 ? For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Big Winner is charging $200 per room per night. If average household income increases by 20%, from $50,000 to $60,000 per year, the quantity of rooms demanded at the Big Winner rooms per night. Therefore, the income elasticity of demand is from rooms per night to hotel rooms at the Big Winner are meaning that If the price of an airline ticket from LAX to LAS were to increase by 10%, from $100 to $110 roundtrip, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Big Winner from rooms per night to rooms per night. Because the cross-price elasticity of demand is , hotel rooms at the Big Winner and airline trips between LAX and LAS are Big Winner is debating decreasing the price of its rooms to $175 per night. Under the initial demand conditions, you can see that this would cause its total revenue to . Decreasing the price will always have this effect on revenue when Big Winner is operating on the portion of its demand curve. Grade It Now Save & Continue Continue without saving