Elasticity of demand for public transportation

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In Vancouver, the public bus system, Translink, uses a multi-tiered system for fares depending on which zone you live in and where you are going. For example, you either pay $2.50 for one zone or $3.75 for two zones, etc.

Some people are in favour of getting rid of the multi-tiered system. They argue that the quantity of transit service demanded would increase sharply if everyone had to pay only $2.50 no matter where you live. They argue that that the increase in revenue due to the increase in ridership would offset any revenue loss due to lower fares.

Those people against the possible change in fares believe that Translink would lose money because of the lower fare paid by some people.

a.) What might the advocates (those in favour) of the new proposal be thinking about the elasticity of demand for public transportation?

Reference no: EM132472884

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