Question

Answer both parts of the following question. a. The San Francisco Chronicle reported that the toll on the Golden Gate Bridge was raised from $2 to $3. Following the toll increase, traffic fell by 5 percent. Based on this information, calculate the arc price elasticity of demand. Is demand elastic or inelastic

Answer 1

The answer is "0.1".

Step-by-step explanation:

Formula:

`\text{Elasticity}= \frac{\% \text{volume changes in demand}}{ \% \text{price rise}}`

Calculating the value of price percent:

`= ((3-2))/(2) * 100 \\\\= (1)/(2) * 100 \\\\= (100)/(2) \\\\=50 \%`

Calculating the value of quantity change:
`= -5 \%`

Calculating the value of elasticity:

`= (-5)/(50) \\\\ = (-1)/(10) \\\\= -0.1`

Through this convention, the environmental signal is decreased and elasticity =0.1 is achieved until conductivity. Whose comparatively in elasticity is not as high as 1.