[ Safari File Edit View History L I AR | R - BRI PROFILE ORDERS L0 R P ES COURSES v Study tools College Success Tips Career Success Tips Bookmarks Window Help (Rl KT T TRt Ty % MindTap - Cengage Learning ;\@& Safari File Edit View History Bookmarks Window Help Fri Mar 22 8:07 PM L0 I CE AR @& ng.cengage.com + [t] S % MindTap - Cengage Learning R e . 2 CENGAGE | MINDTAP Q Search this course Module Three Quiz o X Graph Input Tool 15N Market for Oceans's Hotel Rooms ORDERS [1 Price 100 (Dollars per room) Quantity Demanded (Hotel rooms per night) L0 R P ES COURSES v Demand Factors Average Income Demand (Thousands of 1- dollars) ST AT 1 T o 8 5 g 4 8 o g w 9 o o Airfare from DSM to ACY i (Dollars per 0 50 100 150 200 250 300 350 400 450 500 roundtrip) College Success Tips QUANTITY (Hotel rooms) Room Rate at Meadows (Dollars per night) Career Success Tips For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Oceans is charging $100 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 Oceans from rooms per night to rooms per night. Therefore, the income elasticity of demand is W, meaning that hotel rooms at the Oceans are @& Safari File Edit View History Bookmarks Window Help [ X BN RN @ ng.cengage.com 2] B % MindTap - Cengage Learning g -SR] +. 2 CENGAGE | MINDTAP . Module Three Quiz 100 dollars) 50 Airfare from DSM to ACY PROFILE 0 t (Dollars per 0 50 100 150 200 250 300 350 400 450 500 roundtrip) QUANTITY (Hotel rooms) Roor\\ Rate at Meadows ORDERS (Dollars per night) L0 R P ES For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Oceans is charging $100 per room COURSES v : per night. If average household income increases by 20%, from $50,000 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 W, meaning that hotel rooms at the Oceans Study tools are College Success Tips 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 Career Success Tips demand is W, hotel rooms at the Oceans and hotel rooms at the Meadows are v o, Oceans is debating decreasing the price of its rooms to $75 per night. Under the initial demand conditions, you can see that this would cause its total revenue to w . Decreasing the price will always have this effect on revenue when Oceans is operating on the W portion of [clcTEY RO Save & Continue Continue without saving its demand curve