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Question: 1. With reference to the demand schedule in Figure, calculate the arc elasticity of demand between the prices of (a) £3 and £6, (b) £6 and £9, (c) £9 and £12, (d) £12 and £15, and (e) £15 and £18.
2. A city bus service charges a uniform fare for every journey made. When this fare is increased from 50p to £1 the number of journeys made drops from 80,000 a day to 40,000. Calculate the arc elasticity of demand over this section of the demand schedule for bus journeys.
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