Suppose subway ridership in New York City declined by 10 percent after a fare increase of...
Suppose subway ridership in New York City declined by 10 percent after a fare increase of 25 cents to $2.75. Using the midpoint method, an estimate of the price elasticity of demand for subway rides is .
True or False: According to your estimate, the Transit Authority's revenue rises when the fare increases. True False
Homework Answers
And. Elasticity of demand = % change in Quantity ÷ % change in Prices
% change in price = 2.75 - 2.50 ÷ 2.625 = 9.5 %
Elasticity = 10% ÷ 9.5% = 1.05
So the Revenues won't change much because of change in price because Elasticity is nearly 1.
Best of Luck ! !!
Add Answer to:
Suppose subway ridership in New York City declined by 10 percent
after a fare increase of...
Chapter 5 Problem and Applications 1. Suppose the price elasticity of demand for heating oil is...
Chapter 5 Problem and Applications 1. Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7 in the long run. a. If the price of heating oil rises from $1.80 to $2.20 per gallon, what happens to the quantity of heating oil demanded in the short run? In the long run? (Use the midpoint method in your calculations.) b. Why might this elasticity depend on the time horizon? Cups of coffee and donuts...
The subway fare in your town has just been increased from 50 cents to $1.00 per...
The subway fare in your town has just been increased from 50
cents to $1.00 per ride. As a result, the transit authority notes a
decline in ridership of 60 percent. What is the price elasticity of
demand for subway rides? 1.11 –1.11 0.90 –0.90
The subway fare in your town has just been increased from 50 cents to $1.00 per ride. As a result, the transit authority notes a decline in ridership of 60 percent. What is the price...
3. Suppose the price elasticity of demand for subway trains in Boston and New York City is almost close to zero. If...
3. Suppose the price elasticity of demand for subway trains in Boston and New York City is almost close to zero. If the city authority raises the fare of MBTA passengers by 20% over its current prices to cover the loss of operation of MBTA, how much increase in revenue do you expect due to fare increase of 20%? Give reasoning to substantiate your answer.
Assume that two separate events affect the market for taxi rides in New York City: a....
Assume that two separate events affect the market for taxi rides in New York City: a. There is a 20 percent increase in New York subway fares. As a result, the price of a taxicab ride increases by 5 percent. b. An economic expansion causes a 5 percent increase in the incomes of tourists visiting New York City. As a result, the price of a taxicab ride increases by 2 percent. Describe the cross-price and income elasticity formulas and use...
On a given San Jose –New York City United Airlines flight, there are200 seats.The high fare...
On a given San Jose –New York City United Airlines flight, there are200 seats.The high fare is $675 and the low fare is $375. Demand for the low fare is abundant while demand for the high fare is normally distributed with a mean of 80 and standard deviation 35. Suppose there is no overbooking. a)Suppose 60 seats are protected for the high fare seats.What is the booking limit for the low fare seat? b)Find the optimal protection level for high...
The following graph shows the daily demand curve for bikes in New York City. Use the...
The following graph shows the daily demand curve for bikes in New York City. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. ? 300 275 250 Total Revenue 225 200 175 PRICE (Dollars per bike) 150 A 125 B 100 75 50 25 Demand 0 0 3 6 9 27 30 33 36 12 15 18 21 24...
Refer to Figure 5-1. A perfectly elastic demand curve is shown in Panel D. Panel A. Panel C...
Refer to Figure 5-1. A perfectly elastic demand curve is shown
in
Panel D.
Panel A.
Panel C.
Panel B.
Refer to Figure 5-5. The data in the diagram indicates that
DVDs
are luxury goods.
are both luxury goods and price inelastic goods.
are price inelastic goods.
are both necessities and price inelastic goods.
are necessities.
3-
Consider the following pairs of items:
a. shampoo and conditioner
b. iPhones and earbuds
c. a laptop computer and a desktop computer
d....
FART I TRUE FALSE QUESTIONS (10 points). Please write True (1) or False (F) on the...
FART I TRUE FALSE QUESTIONS (10 points). Please write True (1) or False (F) on the blank Scarcity is the intimited nature of society's resources given society's limited wants 2. A reward is a type of positive incentive. 3. To remove difficulty of double coincidence of wants we use money. 4. An exogenous factor is a variable that can be controlled for inside the model. 5. The PPF will not have a constant slope. 6. The law of demand states...
Chapter overview 1. Reasons for international trade Resources reasons Economic reasons Other reasons 2. Difference between...
Chapter overview 1. Reasons for international trade Resources reasons Economic reasons Other reasons 2. Difference between international trade and domestic trade More complex context More difficult and risky Higher management skills required 3. Basic concept s relating to international trade Visible trade & invisible trade Favorable trade & unfavorable trade General trade system & special trade system Volume of international trade & quantum of international trade Commodity composition of international trade Geographical composition of international trade Degree / ratio of...
Chapter 5 Problem and Applications 1. Suppose the price elasticity of demand for heating oil is 0.2 in the short run and 0.7 in the long run. a. If the price of heating oil rises from $1.80 to $2.20 per gallon, what happens to the quantity of heating oil demanded in the short run? In the long run? (Use the midpoint method in your calculations.) b. Why might this elasticity depend on the time horizon? Cups of coffee and donuts...
The subway fare in your town has just been increased from 50
cents to $1.00 per ride. As a result, the transit authority notes a
decline in ridership of 60 percent. What is the price elasticity of
demand for subway rides? 1.11 –1.11 0.90 –0.90
The subway fare in your town has just been increased from 50 cents to $1.00 per ride. As a result, the transit authority notes a decline in ridership of 60 percent. What is the price...
3. Suppose the price elasticity of demand for subway trains in Boston and New York City is almost close to zero. If the city authority raises the fare of MBTA passengers by 20% over its current prices to cover the loss of operation of MBTA, how much increase in revenue do you expect due to fare increase of 20%? Give reasoning to substantiate your answer.
The following graph shows the daily demand curve for bikes in New York City. Use the green rectangle (triangle symbols) to compute total revenue at various prices along the demand curve. Note: You will not be graded on any changes made to this graph. ? 300 275 250 Total Revenue 225 200 175 PRICE (Dollars per bike) 150 A 125 B 100 75 50 25 Demand 0 0 3 6 9 27 30 33 36 12 15 18 21 24...
Refer to Figure 5-1. A perfectly elastic demand curve is shown
in
Panel D.
Panel A.
Panel C.
Panel B.
Refer to Figure 5-5. The data in the diagram indicates that
DVDs
are luxury goods.
are both luxury goods and price inelastic goods.
are price inelastic goods.
are both necessities and price inelastic goods.
are necessities.
3-
Consider the following pairs of items:
a. shampoo and conditioner
b. iPhones and earbuds
c. a laptop computer and a desktop computer
d....
FART I TRUE FALSE QUESTIONS (10 points). Please write True (1) or False (F) on the blank Scarcity is the intimited nature of society's resources given society's limited wants 2. A reward is a type of positive incentive. 3. To remove difficulty of double coincidence of wants we use money. 4. An exogenous factor is a variable that can be controlled for inside the model. 5. The PPF will not have a constant slope. 6. The law of demand states...
Most questions answered within 3 hours.
-
The cable supporting a 2145-kg elevator has a maximum strength
of 2.18×104 N.
a) What maximum...
asked 6 minutes ago -
Find the critical value(s) and rejection region(s) for a
two-tailed chi-square test with a sample size...
asked 10 minutes ago -
One of your experts gave me an answer of $7.36 but there are
many different answers...
asked 16 minutes ago -
Petrus Framing's cost formula for its supplies cost is $1,790
per month plus $10 per frame....
asked 29 minutes ago -
Introduction
Information design is a field that studies the way information
should be displayed, which is...
asked 26 minutes ago -
1.The main product of the reaction between p-cresol and Br2 /
FeBr3 is:
3-Bromo-4-methyl phenol
2-Bromo-4-methyl...
asked 30 minutes ago -
At present, concentration
of 92235U in naturally
occurring uranium deposits is approximately 0.74 %. What will the...
asked 33 minutes ago -
Question 1:
For the following reaction, 8.72 grams of nitrogen gas are
allowed to react with...
asked 36 minutes ago -
Discuss the benefits and detriments of hard water, and your
opinion on using water softeners.
asked 1 hour ago -
For a Friedel-Crafts alkylation reaction between
1,4-dimethoxybenzene with 3-methyl-2-butanol and sulfuric acid what
product was formed...
asked 51 minutes ago -
This programming assignment needs to be written so that it can
do infix expression to postfix...
asked 57 minutes ago -
Below are the reduction half reactions for chemolithoautotrophic
denitrification, where hydrogen is a source of electrons...
asked 57 minutes ago