The Acmeville Metropolitan Bus Service currently charges $ 0.99 for an all-day ticket, and has an...

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Economics

The Acmeville Metropolitan Bus Service currently charges $ 0.99for an all-day ticket, and has an average of 623 riders a day. Thebus company is not earning a profit, but according to theircontract with the city, they cannot cut the number of buses on theroad. They must therefore find a way to increase revenues. The buscompany is considering increasing the ticket price to $ 1.1 . Themarketing department's studies indicate this price increase wouldreduce usage to 359 riders per day. Calculate the absolute value ofthe price elasticity of demand for bus tickets using the simplepercentage change method. Round your answer to one decimalplace.

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At present Bus service charges 099 for an all day ticket and has an average of 623 riders a day Bus company is considering increasing the ticket price to 110 However this will reduce the See Answer

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