Read the Following Article from the Travel Section of the Philadelphia Inquirer

Read the following article from the travel section of the Philadelphia Inquirer. Use supply and demand analysis with a written explanation to describe the situation recounted below. You do not have to account for every single fact, just provide a fairly complete description of the general themes.

Your answer must be typed (double spaced, 12 pt font, and 1” margins), free of grammatical and typographical errors, and no more than two pages of text. Put diagrams on a separate page. Staple everything together before class

Bill Ordine Sunday, October 7, 2001

Vegas answers lull with big discounts

The economic shock waves from last month's terrorist attacks have battered tourism in general, and Las Vegas in particular. Often regarded as recession-proof, Vegas has found itself vulnerable to the financial and psychological effects of the Sept. 11 horror. Just under half of Las Vegas' 34 million annual guests pass through McCarran International Airport, and with air travel suffering, the immediate impact there was greater than in Atlantic City, where most visitors arrive by car or bus. During the weekend after the attacks, hotel occupancy in Las Vegas fell from the norm of 94 percent to 65 percent, rebounding to 75 percent the next weekend, according to the Las Vegas Convention and Visitors Authority.

The immediate casino response was to slash hotel prices to attract customers and lay off workers to cut expenses. Meanwhile, no component of the Las Vegas tourism machine was as aggressive in trying to rally travelers as National Airlines, which has its hub at McCarran and operates nonstop service from Philadelphia, New York, Chicago, Miami, Dallas, Washington, San Francisco and Los Angeles.

National offered $1 one-way fares in conjunction with deeply discounted return flights so that a round-trip ticket from Philadelphia or New York to Las Vegas was $75. The tickets for most markets were gone in a matter of days.

"Philadelphia had the strongest and quickest reaction in the country," said National spokesman Dik Shimizu. "On the first offer, we sold out every seat from Philly in 2½ days."

Some hotel offers were also incredible. The Venetian, a luxury all-suite hotel, sent an e-mail offer of $59 for selected midweek dates (the rooms normally cost about $150 midweek). Caesars Palace had dates available for $89; the Rio offered packages for $59 a night, and Harrah's had September midweek availability at $39. Many hotels offered three nights for the price of two.

How long deep discounts will be offered remains to be seen. The low pricing comes during Vegas' high season, when hotels are counting on 100 percent occupancy, industry executives said.

Atlantic City visitation rebounded soon after Sept. 11. From that day until Sept. 16, at the Pleasantville toll plaza on the Atlantic City Expressway (the final toll before entering the city), traffic dropped 4.6 percent from the year before, according to the South Jersey Transportation Authority. But for Sept. 17-23, traffic was up 1.6 percent in a year-to-year comparison.

The uncertainty over the weak economy and traveling habits has caused Park Place Entertainment to delay building a new hotel tower at Caesars Palace and postpone, by a few months, a connector bridge between Bally's and the Claridge in Atlantic City. Mandalay Bay in Las Vegas has delayed construction of a giant convention center. However, Steve Wynn still plans to go ahead with his proposed resort at the site of the old Desert Inn, and two new Vegas casinos are expected to open soon, the Palms and Green Valley Ranch Station, in nearby Henderson.