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Question: 9 application elasticity and hotel rooms the following graph input...

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9. Application: Elasticity and hotel rooms The following graph input tool shows the daily demand for hotel rooms at the Big Win management better understand the market, an economist identified three factors, along with the values corresponding to the initial demand curve, are shown in the ner Hotel and Casino in Las Vegas, Nevada. To help the hotel primary factors that affect the demand for rooms each night. These demand following table and alongside the graph input tool. Demand Factor Average American household income Roundtrip airfare from Los Angeles (LAX) to Las Vegas (LAS) Room rate at the Lucky Hotel and Casino, which is near the Big Winner Initial Value $40,000 per year $100 per roundtrip $200 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 Market for Big Winners Hotel Rooms 500 450 400 350 300 250 200 150 100+ 50 Price Dollars per room) (Hotel rooms per night) Demand Factors Average Income Thousands of dollars) 40 Airfare from LAX to 100 Dollars per roundtrip) Room Rate at Lucky Dollars per night 200 50 100 150 200 260 300 350 400 450 500 QUANTITY (Hotel rooms)
For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Big Winner is charging $150 per room per night. If average household income increases by 25%, from $40,000 to $50,000 per year, the quantity of rooms demanded at the Big winner from[一□rooms per night to rooms per night. Therefore, the income elasticity of demand isY meaning that hotel rooms at the Big Winner are If the price of a room at the Lucky were to decrease by 20%, from $200 to $160, while all other dem and factors remain at their initial values, the quantity of rooms demanded at the Big Winnerfromrooms per night to of demand is , hotel rooms at the Big Winner and hotel rooms at the Lucky are rooms per night. Because the cross-price elasticity Big Winner is debating decreasing the price of its rooms to $125 per night. Under the initial demand conditions, you can see that this would cause its total revenue to ▼ . Decreasing the pnce will always have this effect on revenue when Big Winner is operating on the Y portion of its demand curve.
10. Price elasticity of supply in the short run and long run The following graph shows the short-run supply curve for pears. Place the orange line (square symbol) on the following graph to show the most likely long-run supply curve for pears. (Note: Place the points of the line either on I and F or on I and C.) 40+ Long-Run Supply 32 Short-Run Supply 24 2 10 10 QUANTITY (Thousands of pounds of pears) 12
11. Calculating the price elasticity of supply Shen is a retired teacher who lives in San Diego and provides math tutoring for extra cash. At a wage of $25 per hour, he is willing to tutor 6 hours per week. At $35 per hour, he is willing to tutor 16 hours per week. Using the midpoint method, the elasticity of Shens labor supply between the wages of $25 and $35 per hour is approximately means that Shens supply of labor over this wage range isY , which Grade It Now Save & Continue Continue without saving
12. Elastic and inelastic supply The following graph shows the supply of a good. Supply 9 180 80 90 QUANTITY (Units)
For each of the regions, use the midpoint method to identify whether the supply of this good is elastic or inelastic. Elastic Inelastic Region Between Y and Z Between W and X True or False: For high levels of quantity supplied where firms have reached near maximum capacity, supply becomes less elastic because firms may need to invest in additional capital in order to further increase production. O True False
13. The variety of supply curves The following graph displays four supply curves (HH, 11,J, and KK) that intersect at point A. 400 360 320 280 a 240 + 200 HH 160 t 120 0 40 80 120 180 200 240 280 320 380 400 QUANTITY (Units)
Using the graph, complete the table that follows by indicating whether each statement is true or false. Statement Curve 33 is less elastic between points A and D than curve KK is between points A and C.o Between points A and B, curve II is perfectly inelastic. Between points A and D, curve 33 is inelastic. True False
14. Application: Demand elasticity and agriculture Consider the market for soybeans. The following graph shows the weekly demand for soybeans and the weekly supply of soybeans. Suppose a blight occurs that destroys a significant portion of soybean crops. Show the effect this shock has on the market for soybeans by shifting the demand curve, supply curve, or both. Note: Select and drag one or both of the curves to the desired to its original position, just drag it a little farther position. Curves will snap into position, so if you try to move ฮ curve and it snaps back 30 24 Demand 18 Supply 12 and
One of the growers is excited by the price increase caused by the blight because he believes it will increase student, you can use elastioties revenue in this market. As an economics to determine whether this change in price will lead to an increase or decrease in total revenue in this market. Using the midpoint method, the price elasticity of demand for soybeans between the prices of $15 and $18 per bushel is,which means sbetween these two points. Therefore, you would tell the grower that his claim is , because total revenue will as a result of the blight Confirm your previous conclusion by calculating total revenue in the soybean market before and after the bilight. Enter these values in the following table. Before Blight After Blight Total Revenue (Millions of Dollars)
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