Daily demand for tokens on major urban rapid transit system

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Reference no: EM13801696

The chart on the following page shows the average daily demand for tokens on a major urban rapid transit system.

a) What is the elasticity of demand at a fare of $2.50/token? (Show your calculations)

b) Is the revenue maximizing fare higher than, lower than or equal to $2.50/token

Explain your reasoning using the concept of elasticity

Reference no: EM13801696

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