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Price Elasticity of Demand?

Suppose the price elasticity of demand for bus rides in Baltimore is .4. Suppose the bus fare increases by 10% by what percentage will ridership change? Explain? What will happen to total revenue obtained by the MTA???

Please help. I keep doing the math but I feel like I am soooo wrong!

1 Answer

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  • 8 years ago
    Favorite Answer

    Not if gas prices keep going up. Bus will still make profit..Do the calculation yourself if its your homework.

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