| Suppose the MGM Grand is currently charging $150 per night to stay at the hotel; average household income is $50,000 (its initial value); and the Luxor charges $150 per night (its initial value). If the price of an airline ticket from LAX to LAS were to increase by approximately 10%, from $100 to $110 round-trip, the quantity of rooms demanded would decrease from 300 to 280 per night, a decrease of 7%; therefore, the cross elasticity of demand between these two goods is -0.7. From the fact that the cross elasticity of demand is _____, we may conclude that hotel rooms at the MGM Grand and airline trips between LAX and LAS are ______. |