In November 1995 the MTA raised the price for a single ride in the NYC subway and bus system from $1.25 to $1.50. A New York Times article published in February 1996, reported that in the month of December 1995, which was the first month after the price increase, subway ridership fell by 4.3%, while bus ridership fell by 11%. (a) On the basis of this information, what was the elasticity of demand for the NYC subway in 1995 and what was the elasticity of demand for the NYC buses in 1995?

Answer rating: 100% (QA)

To calculate the elasticity of demand using the given information we can use the followin... View the full answer