Suppose the Price of a Bus Ticket Rises from $2

question 17

Multiple Choice

Suppose the price of a bus ticket rises from $2.75 to $3 and the number of tickets sold falls from 10 000 to 8500, the price elasticity of demand is:

• A) elastic.
• B) unitary elastic.
• C) perfectly elastic.
• D) inelastic.

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Definitions:

Substitutes

Goods or services that can be used in place of each other, satisfying the same needs or desires, and thus competing in the same market.

Price of Coffee

The amount of money required to purchase a unit or a specific quantity of coffee, which can vary based on factors like quality, origin, and market demand.

Demand for Tea

The quantity of tea that consumers are willing and able to purchase at various prices within a given time period.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of the good that buyers are willing to purchase at various prices.