The Following Graph Input Tool Shows The Daily Demand For Hotel Rooms At The Peacock Hotel And Casino In Las Vegas Neva 1 (43.7 KiB) Viewed 129 times
The Following Graph Input Tool Shows The Daily Demand For Hotel Rooms At The Peacock Hotel And Casino In Las Vegas Neva 2 (37 KiB) Viewed 129 times
The following graph input tool shows the daily demand for hotel rooms at the Peacock 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. Initial Value Demand Factor Average American household Income Roundtrip airfare from Los Angeles (LAX) to Las Vegas (LAS) Room rate at the Grandiose Hotel and Casino, which is near the Peacock $50,000 per year $100 per roundtrip $250 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. Graph Input Tool ? 500 Market for Peacock's Hotel Rooms 450 200 400 Price (Dollars per room) Quantity Demanded (Hotel rooms per night) 300 350 300 PRICE (Dollars per room) 250 Demand Factors 110 Det and 50 100 Average Income (Thousands of dollars) Airfare from LAX to LAS (Dolars per roundtrip) 100 50 0 Room Rate at
ор Market for Peacock's Hotel Rooms 500 450 200 Price per room) Quantity Demanded Canelo per 300 Tools PRICE (Dollars per room Demand Factors 50 10 100 Derrand 900 ps Average Income Thousands of Airfare from LAX to LAS Darrer rundt Room Rate at Grandiose (Dan pere) 0 250 100 200 250 300 350 400 45000 QUANTITY Hollroom) then to Por each of the following scenarios, begin by assuming that all demand factors are set to their original values and Peacock 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 rome demanded at the Peacock from rooms per night to rooms per night. Therefore, the income elasticity of demand is meaning that hotel rooms at the Peacockare If the price of an artine ticket from tax 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 Peacock from moms per night to rooms per night. Because the cross-price elasticity of demands hotel rooms at the Peacock and airline trips between X and IAS are Peacock 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 of revenue when Peacock is operating on the portion of its demand curve
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