What about the two-year period

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Reference no: EM131130287

Projecting Transit Ridership. As a transit planner, your job is to predict ridership and total fare revenue. Suppose the short-run elasticity of demand for commuter rail (over a one-month period) is 0.60, and the long-run elasticity (over a two-year period) is 1.60. The current ridership is 100,000 people per day. Suppose the transit authority decides to increase its fares from $2.00 to $2.20.

a. Predict the changes in train ridership over a onemonth period (the short run) and a two-year period (the long run).

b. Over the one-month period, will total fare revenue increase or decrease? What about the two-year period?

Reference no: EM131130287

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