The Roof Top Resort sold 4,000 rooms with an ADR of $90.00 in the past month. During this month, the ADR is increased by $12.00 and the total number of rooms sold is now 3,700. What is the price elasticity of this demand? What is the effect of the decrease in the #of rooms to the total room revenue for the Roof Top Resort during this month? Group of answer choices
.64 inelastic demand and $17,400 increase in total room revenue.
.58 elastic demand and $17,400 increase in total room revenue.
.64 elastic demand and $17,400 increase in total room revenue. .
.58 inelastic demand and $17,400 increase in total room revenue.
.58 inelastic and 17400
increase in total room revenue
The Roof Top Resort sold 4,000 rooms with an ADR of $90.00 in the past month....
The Roof Top Resort sold 4,000 rooms with an ADR of $90.00 in the past month. During this month, the ADR is increased by $12.00 and the total number of rooms sold is now 3,700. What is the price elasticity of this demand? What is the effect of the decrease in the #of rooms to the total room revenue for the Roof Top Resort during this month? Group of answer choices .64 inelastic demand and $17,400 increase in total room...
Comfort Hotel has sold 2,800 rooms with an ADR of $110.00 during the recent month. The management is planning to decrease the current ADR to $70.00 for the next month. This reduction in ADR will affect the guest demand by increasing the number of rooms sold to 4,200 rooms. Is the price elasticity of this demand elastic or inelastic (show your calculations)?
Problem 12 The Myer Motel (MM), a rooms-only fifty-room lodging operation, has a cost structure as follows: Monthly fixed costs = $20,000 Variable costs/room sold = $20 ADR = $60 Average Tax Rate = 20 percent Required: 1 What is MM's CMR? 2. What is MM's breakeven point? (in rooms sold) 3. If MM is to make $10,000 of monthly profit (after tax), what must its total revenue be? 4. If the MM makes $10,000 of monthly profit during June,...
PLT restaurant sold 2,500 lunch boxes during the past month with a price of $10.00 per lunch box. During this month, the price of a lunch box is increased by $5.00 and the total number of lunch boxes sold now is 2,200. What is the price elasticity of demand? What is the effect of the decrease in the #of lunch boxes to the total revenue for the PLT restaurant during this month?
Problem 12 The Myer Motel (MM), a rooms-only fifty-room lodging operation, ha follows: Monthly fixed costs - $20,000 Variable costs/room sold = $20 ADR = $60 Average Tax Rate = 20 percent Required: 1 What is MM's CMR? 2. What is MM's breakeven point? (in rooms sold) 3. If MM is to make $10,000 of monthly profit (after tax), what must its total revenue be? 4. If the MM makes $10,000 of monthly profit during June, what day of the...
8. Application: Elasticity and 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.Demand FactorInitial ValueAverage American household...
1. Last week, Cal sold an average of 4,000 gallons per day at an average price of $2.658 per gallon. This week, he raised the average price to $2.758 per gallon. His station is now selling an average of 3,600 gallons per day. Fixed costs of operating the gas station are $438 per day. What is the price...
Imagine that the market for hotel rooms in Hotel California is perfectly competitive. In a typical day hotel rooms go for $100, and 1000 rooms are rented. To raise revenue, the mayor of Hotel California decides to charge hotels a lump sum tax per rented room (a lump sum tax is a set dollar amount per room rented). After the tax is imposed, the going rate for hotel rooms rises to $108, the after-tax money received by hotels for a...
9. Application: Elasticity and hotel rooms The following graph input tool shows the daily demand for hotel rooms at the Triple Sevens 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...
1) Aday Resort and Spa recorded the following information last month: Operating Days 30 Total Rooms Sold 1,677 Rooms Available 65 per night Occupancy % 86% ADR $45.00 Variable Costs Housekeeping Wages $ 16,450.00 Supplies $ 2,740.00 Utilities $ 3,320.00 Miscellaneous $ 1,420.00 Fixed Costs Mortgage $ 6,000.00 Insurance $ 2,000.00 Depreciation $ 3,000.00 Salary $ 5,400.00 Using the information above, calculate the following: Breakeven Rooms Select one: a. 536 b. 208 c. 499 d. 1950 2) The Vista Room Restaurant has used historical data, and averaged...