Economics 9708 · AS & A Level · Price elasticity of demand

Price elasticity of demand — practice question

A municipal authority is considering whether to raise car parking charges and add more lanes reserved for bus use only. One official claimed that higher car parking charges ought to lead to more bus travel. A second official claimed that increasing the frequency of bus services will reduce the demand for bus travel. Are these official statements correct or incorrect?

  • Afirst statement correct; second statement correct
  • Bfirst statement correct; second statement incorrect
  • Cfirst statement incorrect; second statement correct
  • Dfirst statement incorrect; second statement incorrect

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