A-LevelEconomicsThe price system and the microeconomy9708/12 · Feb/Mar 2016 · Q71 Mark
In a town, bus fares fall by 50% and this leads to an increase in bus use by 30%. The effect on car use is very low with only a 1% reduction. 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
✓ Correct answer
C: +0.02
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