Price and Income Elasticity:
I am trying to work on the 3 questions below and am having a problem with calculating these, and am after an answer to review for each, so that I can see the method used and then apply to other questions and work required. Data below:
Question 1. Calculate the price elasticity using 1992 data
The ratio of the percentage change in quantity demanded to the percentage change in price, , assuming that all other factors influencing demand remain unchanged
Question 2. Calculate the income elasticity using 1992 data
The ratio of the percentage change in quantity to the percentage change, assuming that all other factors influencing demand remain unchanged
Question 3. If the fare in increased to $1.50, what is the expected impact on weekly revenues to the transit system if all other variables remain at there 1992 levels
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STA Data on Transit Ridership
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Year
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Weekly Riders (Y) (x 1,000)
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Price (P) per Ride (Cents)
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Population (T) (x 1,000
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Income (I)
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Parking Rate (H) (Cents)
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1966
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1200
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15
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1800
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2900
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50
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1967
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1190
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15
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1790
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3100
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50
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1968
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1195
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15
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1780
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3200
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60
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1969
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1110
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25
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1778
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3250
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60
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1970
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1105
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25
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1750
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3275
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60
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1971
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1115
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25
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1740
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3290
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70
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1972
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1130
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25
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1725
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4100
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75
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1973
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1095
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30
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1725
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4300
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75
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1974
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1087
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30
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1720
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4400
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75
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1975
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1087
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30
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1705
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4600
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80
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1976
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1080
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30
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1710
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4815
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80
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1977
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1020
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40
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1700
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5285
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80
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1978
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1010
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40
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1695
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5665
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85
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1979
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1010
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40
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1695
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5800
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100
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1980
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1005
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40
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1690
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5900
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105
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1981
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995
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40
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1630
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5915
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105
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1982
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930
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75
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1640
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6325
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105
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1983
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915
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75
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1635
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6500
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110
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1984
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920
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75
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1630
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6612
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125
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1985
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940
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75
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1620
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6883
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130
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1986
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950
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75
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1615
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7005
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150
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1987
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910
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100
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1605
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7234
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155
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1988
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930
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100
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1590
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7500
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165
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1989
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933
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100
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1595
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7600
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175
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1990
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940
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100
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1590
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7800
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175
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1991
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948
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100
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1600
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8000
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190
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1992
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955
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100
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1610
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8100
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200
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