Here\'s the data again: Boston New York Year Subway Fare (in dollars) Annual Rid
ID: 1119916 • Letter: H
Question
Here's the data again:
Boston
New York
Year
Subway Fare (in dollars)
Annual Ridership (in millions, rounded)
Subway Fare (in dollars)
Annual Ridership (in millions, rounded)
1979
0.25
156
0.50
1077
1980
0.50
158
0.60
1009
1981
0.75
143
0.75
1011
1981
0.60
144
0.75
989
Compute the price elasticity of demand for Boston for the 50 to 75 cent price change and for New York. Round to the nearest tenth.
Boston
New York
Year
Subway Fare (in dollars)
Annual Ridership (in millions, rounded)
Subway Fare (in dollars)
Annual Ridership (in millions, rounded)
1979
0.25
156
0.50
1077
1980
0.50
158
0.60
1009
1981
0.75
143
0.75
1011
1981
0.60
144
0.75
989
Explanation / Answer
Boston:
PED = (143 - 158) / (0.75 - 0.50) * (0.50 + 0.75) / (158 + 143)
= (-15 / 0.25) * (1.25 / 301)
= -0.25
The absolute value is 0.25