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

Price elasticity of demand — practice question

In one town, bus fares decrease by 50% and, as a result, bus use rises by 30%. The impact on car use is very small, with only a 1% fall. What is the value of the cross-elasticity of demand between car travel and bus travel?

  • A–0.60
  • B–0.02
  • C+0.02
  • D+0.60

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