The city government of a major metropolitan area in the US is losing millions of

Question

The city government of a major metropolitan area in the US is losing millions of dollars on its system of mass transit (buses and subways). The government proposes to increase the fare of a ticket by 20 percent and they have asked you for your advice. You know that the price elasticity of demand for mass transit is 0.75. Will the proposal to increase the fare raise revenue for the city government? Briefly explain your answer. You have the information shown in the accompanying table about a firm's costs. COMPLETE THE MISSING DATA.

Explanation / Answer

3. yes, the price elasticity is 0.75, it means if we increase price by one unit the demand will be less by 0.75 untis. so in the proportionate of income will be higher than existing case. so, the local government can increase the ticket price.

4. if the data missed at one system or web portal, definitely it will be available in server. if we find right tools to search the data, we can get it.

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