Initial Value Demand Factor $40,000 per year Average American household income $200 per roundtrip Roundtrip airfare from Des Moines (DSM) to Atlantic City (ACY) $200 per night Room rate at the Meadows Hotel and Casino, which is near the Oceans 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 ? Market for Oceans's Hotel Rooms 500 Price 300 (Dollars per room) Quantity 200 Demanded ( Hotel rooms per night) PRICE (Dollars per room) Demand Factors Demand Average Income 40 Thousands of dollars) Airfare from DSM to 200 (Dollars pe 0 50 100 150 200 250 300 350 400 450 500 roundtrip) QUANTITY (Hotel rooms) Room Rate at 200 Meadows (Dollars per night) For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Oceans is charging $300 per room per night. If average household income increases by 50%, from $40,000 to $60,000 per year, the quantity of rooms demanded at the Oceans from rooms per night to rooms per night. Therefore, the income elasticity of demand is , meaning that hotel rooms at the Oceans are If the price of a room at the Meadows were to decrease by 20%, from $200 to $160, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Oceans from rooms per night to rooms per night. Because the cross-price elasticity of demand is , hotel rooms at the Oceans and hotel rooms at the Meadows are Oceans is debating decreasing the price of its rooms to $275 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 Oceans is operating on the demand curve. portion of its