Suppose the short-run elasticity of demand for commuter rail ( over a moth period) is .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 one month period ( the short run) and a two year period the long (Long run)
B) over the one month period, will total fare revenue increase or decrease? what about the two year period? show total revenue and provide an explanation and analysis.