The number of taxicabs in Motorville and the taxicab fares are regulated. The fare currently charged is Rs.500 a ride. Motorville taxicab drivers want to obtain government's permission to raise the fare to increase their revenues and ask you to be their economic adviser. After studying the market, you come up with the following demand schedule for taxicab rides: Price (Rupees per ride) Quantity demanded (rides per month)300 160400 120500 80600 40700 0 Calculate the price elasticity of demand for taxicab rides as the fare falls from Rs.500 to Rs.400. Is the demand price elastic or inelastic for this fare decrease?

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