The following graph input tool shows the daily 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 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.
Demand Factor
Initial Value
Average American household income	$40,000 per year
Round trip airfare from New York (JFK) to Las Vegas (LAS)	$200 per round trip
Room rate at the Lucky Hotel and Casino, which is near the Big Winner	$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.
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PRICE (Dollars per room)
QUANTITY (Hotel rooms)
Demand

Graph Input Tool
Market for Big Winner's Hotel Rooms

Price
(Dollars per room)
350

Quantity Demanded
(Hotel rooms per night)
150

Demand Factors

Average Income
(Thousands of dollars)
40

Airfare from JFK to LAS
(Dollars per round trip)
200

Room Rate at Lucky
(Dollars per night)
250

Based on the details provided, this scenario involves the demand for hotel rooms at the Big Winner Hotel and Casino in Las Vegas. The factors influencing the demand curve include average household income, airfare from New York (JFK) to Las Vegas (LAS), and the room rate at a competing hotel (Lucky Hotel and Casino). Here’s a breakdown of how these factors could influence the demand curve:

1. **Price of Rooms (P)**: The price per night at the Big Winner Hotel is currently set at $350, and the corresponding quantity demanded is 150 rooms per night. If this price changes, it will affect the quantity of rooms demanded, reflecting the law of demand (higher prices typically result in lower quantity demanded and vice versa).

2. **Demand Factors**:
   - **Average American Household Income**: A higher average income would generally increase demand for rooms, as consumers would have more disposable income for travel and leisure. Conversely, a lower average income could decrease demand.
   - **Airfare from New York (JFK) to Las Vegas (LAS)**: Lower airfare would likely increase demand for hotel rooms since the total cost of a trip to Las Vegas becomes cheaper, making the destination more attractive.
   - **Room Rate at the Lucky Hotel**: A lower room rate at a competing hotel (Lucky Hotel) would likely decrease demand for rooms at the Big Winner, as consumers may opt for the cheaper option. Conversely, if Lucky’s room rate increases, demand for Big Winner’s rooms might rise.

### Analysis with the Initial Values:
- **Price per room**: \$350
- **Quantity demanded**: 150 rooms per night
- **Average income**: \$40,000 per year (\$40,000 is 40 in thousands)
- **Airfare**: \$200 per round trip
- **Competing room rate**: \$250 at Lucky Hotel

If you were to input changes into the graph (such as adjusting the price or the demand factors), the demand curve would shift accordingly. For example:
- **Increase in Average Income**: This would shift the demand curve to the right, indicating a higher quantity of rooms demanded at each price point.
- **Decrease in Airfare**: Similarly, lowering airfare would shift the demand curve to the right.
- **Increase in Lucky Hotel Room Rate**: If Lucky's room rate goes up, more people may opt for Big Winner, shifting the demand curve right.

Would you like further details on how each factor specifically shifts the demand curve or a graphical analysis?

### Follow-up Questions:
1. How does a change in room rates at Big Winner Hotel affect the total revenue?
2. How would increasing the airfare from JFK to LAS affect the demand for Big Winner’s hotel rooms?
3. What happens to the quantity demanded if the average American household income rises to $50,000 per year?
4. How does competition from the Lucky Hotel affect Big Winner's pricing strategy?
5. What would be the long-term effects on demand if airfares to Las Vegas continue to decline?

**Tip**: Always consider how each factor (price, income, airfare, competition) interrelates when analyzing shifts in demand in markets like hotel rooms.

The following graph input tool shows the daily 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 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. Use the graph input tool to help you answer the following questions.

Explore the impact of household income, airfare, and competitor pricing on the demand for hotel rooms at the Big Winner Hotel. This problem breaks down key economic concepts, including demand elasticity and revenue calculation, suitable for college-level economics students.

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