For each of the following scenarios, begin by assuming that all demand factors are set to their original values and Triple Sevens is charging $150 per room per night. If average household income increases by 10%, from $50,000 to $55,000 per year, the quantity of rooms demanded at the Triple Sevens Rises from 150 rooms per night to 200 rooms per night. Therefore, the income elasticity of demand ispositive , meaning that hotel rooms at the Triple Sevens area normal good . If the price of a room at the Exhilaration were to decrease by 20%, from $200 to $160, while all other demand factors remain at their initial values, the quantity of rooms demanded at the Triple Seven Falls from 150 rooms per night to 50 rooms per night. Because the cross-price elasticity of demand isnegative , hotel rooms at the Triple Sevens and hotel rooms at the Exhilaration are substitutes . Triple Sevens 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 price will always have this effect on revenue when Triple Sevens is operating on the portion of its demand curve.