Given
Price elasticity of demand for bus rides = 0.5
Income elasticity of demand for bus rides = -0.1
Cross-price elasticity of demand for bus rides with respect to gasoline = 0.2
a: would an increase in price of a bus ride increase or decrease total revenue? why?
b: if the price of gas increased b 10%(holding the demand for gas constant) how will the quantity demanded of bus rides change (direction and %)?
c what does this indicate about the relationship of gasoline and bus rides in consumption?