Suppose the cross elasticity of demand for metro rides is 0.8 and total ridership per day is
2 lakhs. What will be the change in the total metro rides if the price of the bus rides rises by
5%.
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Answered by
0
Explanation:
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Answered by
2
Answer:
8000
Explanation:
EC= %ΔQx ÷ %ΔPx (chang in quantity demand of x ÷ change in price of related command)
EC = 0.8 , %Δ in MR (metro rides) = ? , %Δin P (BR= bus rides) = 5
EC= %Δ(MR) ÷ %ΔP(br) =0.8
∴ %ΔMR ÷5 = 0.8
, %ΔMR = 4% (TOTAL RIDERSHIP = 200000)
∴ change in total MR = %ΔMR × total ridership
4÷100 × 200000 = 8000 ans_
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