In Pioneer Ville, The price elasticity of demand for bus rides is -0.5 the income elasticity of bus rides is 0.62 and cross price elasticity of demand for bus rides with respect to gasoline is -0.2. 1. Is the demand for bus rides elastic or inelastic? Why? 2. Would an increase in the price of bus rides increase the bus company's total revenue or not? Explain your answer. 3. If incomes increase by 5 percent what will be the percentage change in the number of bus rides?

In Pioneer Ville, The price elasticity of demand for bus rides is -0.5 the income elasticity of bus rides is 0.62 and cross price elasticity of demand for bus rides with respect to gasoline is -0.2. 1. Is the demand for bus rides elastic or inelastic? Why? 2. Would an increase in the price of bus rides increase the bus company's total revenue or not? Explain your answer. 3. If incomes increase by 5 percent what will be the percentage change in the number of bus rides?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 8E: The Stopdecay Company sells an electric toothbrush for $25. Its sales have averaged 8,000 units per...

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