Question:
Economists have estimated the following transportation elasticities. For each pair, explain possible reasons why the elasticities differ.
a. elasticity of demand for buses is 0.23 during peak hours and 0.42 during off-peak hours
b. elasticity of demand for buses is 0.7 in the short run and 1.5 in the long run
c. elasticity or demand for toll roads is 4.7 for low-income commuters and 0.63 for high-income commuters.