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What is the own price elasticity of demand for bus rides

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Reference no: EM133081852

The demand for bus rides per month is estimated to follow the equation:Q = 9,750 - 500p + 5i + 250Pt where p is the price of a bus ride, i is the average consumer income, and Pt is the price of a train ride.

Suppose that p = 1.50, Pt = $400 and i = $3000. What is the cross-price elasticity of demand? Are bus and train rides substitutes or complements?

As in (a), suppose that p = 1.50, Pt = $400 and i = $3000. What is the own price elasticity of demand for bus rides?

Suppose that the price of a train ride falls to Pt = $350. What should be the change in the price of bus rides to guarantee that the demand for bus rides does not change?

Reference no: EM133081852

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