Homework Answers
Income elasticity of demand for concert tickets = % Change in demand for concert tickets/% Change in income
= 0.15/((240-200)/200)
= 0.15/0.2
= 0.75
Income elasticity of demand for bus rides = % Change in demand for bus rides/% Change in income
= -0.05/((240-200)/200)
= -0.05/0.2
= -0.25
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