Calculate the price elasticity of demand for each bridge

Reference no: EM131020564

The Delaware River Joint Toll Bridge Commission increased the toll from $0.50 to $1.00 on the bridges on Route 22 and Interstate 78 from New Jersey to Pennsylvania. Use the information in the following table to answer the questions. (Assume that besides the toll change, nothing occurred during the months that would affect consumer demand.)

Number of Vehicles Crossing the Bridge
Month	Toll	Route 22 Bridge	Interstate 78 Bridge
November	$0.05	519,337	728,022
December	1	433,691	656,257

a. Calculate the price elasticity of demand for each bridge, using the midpoint formula.

b. How much total revenue did the commission collect from these bridges in November? How much did it collect in December? Relate your answer to your answer in (a).

Source: Garrett Therolf, "Frugal Drivers Flood Free Bridge," The Morning Call, January 20, 2003.

Reference no: EM131020564

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