Answered: price inelastic

Business

Economics

price inelastic

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 9SCQ: Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the...

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Question

Please answer

The bus fare increases from $1.25 to $1.50. If the demand is price inelastic, what is going to happen to :

a) the # of people riding buses

b) the city's revenues?

Select one:

a. 1) Decrease; 2) Decrease

b. 1) No Change; 2) Increase

c. 1) Increase; 2)Increase

d. 1) Decrease; 2) Increase

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