The following graph input tool shows the dally demand for hotel rooms at the Big Winner 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 roomis 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. \begin{tabular}{lc} \hline Demand Factor & Initial Value \\ \hline Average American household Income & $\$ 40,000$ per year \\ Roundtrip airfare from New York (JFK) to Las Vegas (LAS) & $\$ 200$ per roundtrip \\ Room rate at the Lucky Hotel and Casino, which is near the nig Winner & $\$ 200$ per night \end{tabular} Use the graph input tool to help you answer the following questions, You will not be graded an 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 Winner's Hotel Rooms Price (Dollars per room) 200 Quantity Dernanded 300 (Hotel rooms per night) Demand Factors Average Income (Thousands of dollars) Airfare from JFK to LAS (Dollars pee roundtrip) Room Rate at Lucky (Dollars per night) (?) For each of the following scenarios, begin by assuming that all demand factors are set to their original values and 8 ig Winner is charging 5200 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 Big Winner $\checkmark$ from rooms per night to rooms per night. Therefore, the income elasticity of demand is , 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 demand factors remain at their inital valuesl the quantity of rooms demanded at the Big Winner from rooms per night to rooms per night. Because the cross-price

For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Big Winner is charging $\$ 200$ 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 Big Winner, rooms per night to rooms per night. Therefore, the income elasticity of demand is , meaning that hotel rooms Big Winner are If the price of a room at the Lucky were to decrease by $20 \%$, from $\$ 200$ to $\$ 160$, while all other demand factors remain at their initial values, th 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 hotel cooms at the Lucky 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 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.