Calculate price elasticity of demand for subway rides if

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Reference no: EM13393299

The subway fare in your town has just been increased from a current level of 50 cent to $1.00 per ride. As a result the transit authority notes s a decline in ride ship of 30 percent.

A. compute the price elasticity of demand for subway rides

B. if the transit authority reduces the fare back to 50 cents, what impact would you expect on the ridership? Why?

Reference no: EM13393299

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