You are Lori Lightfoot. The city needs money. You are contemplating 2 sources of revenue: levying a tax on gas in Chicago at $.50/ gal, and/or increasing the CTA fare $.25. The 2 demand schedules are as follows. Gas price Gallons demanded (in millions) CTA fare Number of riders (one way) (in millions) $4.50 1 $2.00 6 4.00 1.1 1.75 8 3.50 1.2 1.50 10 3.00 1.3 What are the elasticites for gas tax and increase in CTA fares using the mid point method?
You are Lori Lightfoot. The city needs money. You are contemplating 2 sources of revenue: levying a tax on gas in Chicago at $.50/ gal, and/or increasing the CTA fare $.25. The 2
Gas
(one way) (in millions)
$4.50 1 $2.00 6
4.00 1.1 1.75 8
3.50 1.2 1.50 10
3.00 1.3
What are the elasticites for gas tax and increase in CTA fares using the mid point method?
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