The base rate for a taxi fare in Toronto was recently raised by the Toronto taxi Commission from $3.00 to $3.50. After this increase, taxicab ridership decreased by 8%. Using the midpoint formula, determine if the demand for taxi rides in Toronto is elastic or inelastic. Why might this estimate of elasticity be inaccurate. From your calculation, what happened to the cab driver’s revenue after the fare rose?
The base rate for a taxi fare in Toronto was recently raised by the Toronto taxi Commission from $3.00 to $3.50. After this increase, taxicab ridership decreased by 8%. Using the midpoint formula, determine if the demand for taxi rides in Toronto is elastic or inelastic. Why might this estimate of elasticity be inaccurate. From your calculation, what happened to the cab driver’s revenue after the fare rose?
Chapter1: Making Economics Decisions
Section: Chapter Questions
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c. The base rate for a taxi fare in Toronto was recently raised by the Toronto taxi Commission from $3.00 to $3.50. After this increase, taxicab ridership decreased by 8%. Using the midpoint formula, determine if the demand for taxi rides in Toronto is elastic or inelastic. Why might this estimate of elasticity be inaccurate. From your calculation, what happened to the cab driver’s revenue after the fare rose?
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