answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
DanielleElmas [232]
2 years ago
14

The number of taxicabs in Motorville and the taxicab fares are regulated. The fare currently charged is Rs.500 a ride. Motorvill

e 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)

300 160

400 120

500 80

600 40

700 0



(i) Calculate the price elasticity of demand for taxicab rides as the fare rises from Rs.500 to Rs.600. Is the demand price elastic or inelastic for this fare rise? (2 Marks)

(ii) What happens to the taxicab drivers' total revenue if the fare rises from Rs.500 to Rs.600? How can you use your answers in part “a” to answer this question? Should the drivers try to obtain permission to raise the fare? (2 Marks)

(iii) 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?



​
Business
1 answer:
larisa86 [58]2 years ago
4 0

Answer:

The answer is below

Explanation:

i) The price elasticity of demand is given by the formula:

Price \ elasticity\ of \ demand=\frac{\Delta Q}{\Delta P} =\frac{\frac{Q_2-Q_1}{(Q_2+Q_1)/2} }{\frac{P_2-P_1}{(P_2+P_1)/2} } \\\\Price \ elasticity\ of \ demand=\frac{\frac{40-80}{(40+80)/2} }{\frac{600-500}{(600+500)/2} }=\frac{-2/3}{2/11} =3.667 (ignore \ the\ sign)

Since the price elasticity of demand is greater than 1 hence it is elastic

ii) Since the price elasticity of demand is elastic as a result of increase in fare, hence the total revenue would decrease.

iii)

Price \ elasticity\ of \ demand=\frac{\Delta Q}{\Delta P} =\frac{\frac{Q_2-Q_1}{(Q_2+Q_1)/2} }{\frac{P_2-P_1}{(P_2+P_1)/2} } \\\\Price \ elasticity\ of \ demand=\frac{\frac{120-80}{(120+80)/2} }{\frac{400-500}{(400+500)/2} }=\frac{0.4}{-2/9} =1.8 (ignore \ the\ sign)

Since the price elasticity of demand is greater than 1 hence it is elastic

You might be interested in
Antarctica has been continuously glaciated for the last __________ years. geology
o-na [289]

Answer:

15 million years

Explanation:

Antarctica is the continent that is spread around the South Pole, known for being covered with ice, and being the coldest place on the planet. The glaciation of the continent started around 34 million years, started to speed up since 23 million years ago, and became dominant on this continent only around 15 million years ago. Antarctica has not always been covered in ice, and in fact, through the majority of its geologic history Antarctica has been covered with dense forests. This was possible because the continent was much further north, relatively close to the Equator, thus its climate was tropical, subtropical, and temperate. That all started to change as first Pangaea, and then Gondwanaland broke apart, and Antarctica was the piece that was moving toward the South Pole. As Africa, India, Australia, and at last South America drifted apart from Antarctica, the continent was left surrounded by ocean waters where very cold ocean currents occurred because of the continental drift. On top of it the continent got into a place where the sunlight is very weak, thus gradually it started to freeze and had become almost entirely glaciated.

3 0
2 years ago
Read 2 more answers
True or False: Using specific position titles in ICS helps to describe the responsibilities of the position.
Mila [183]

Answer:

True

Explanation:Using specific position titles in ICS helps to describe the responsibilities of the position.

5 0
2 years ago
Read 2 more answers
Choose all the scenarios below that would cause a decrease in the supply of labor in the agricultural industry.
Alika [10]

Answer:

  • b. As the population in the United States ages, fewer workers have the physical ability to work in the industry.
  • d. Due to global warming, working conditions on farms have become undesirable for more and more people.
  • e. The adoption of strict immigration laws reduces the number of legal and illegal immigrants in the United States.
  • h. New machinery is replacing workers in the harvesting of crops.

Explanation:

With workers getting older and being unable to be as productive as they used to be, they will have to drop out of industries that require physical strength including farming. This will therefore reduce people working in agriculture.

With global warming having made working in the fields much more harsh, people are avoiding careers that would keep them outdoors including farming which has led to a drop in the labor supply for agriculture.

A significant portion of workers in agriculture are immigrants so when immigration laws limit the number of immigrants coming in, labor supply in agriculture will reduce.

New machinery reduces the need for workers in agriculture so the more they are bought, the less workers are needed. This will therefore directly reduce the number of people working in agriculture.

7 0
1 year ago
Compute the respective net cash flows and cumulative cash balances for the months indicated on the following cash budget for six
LiRa [457]

Answer:

Cumulative cash flow - $420

Net cash flow

Jan = $100

Feb= $150

Mar= $90

Apri -$55

May = $25

June -0

Explanation:

                                          Jan - Feb - Mar - Apr - May - June

sale receipt                        300   350  300   350   400   300

Disbursement                    (200)  (200) (210) (295) (375) (300)

Net cash flow                    100     150    90     55      25     0

Cumulative balance = $420

8 0
2 years ago
1.what’s one category you wish fewer taxes were spent on ? why?
liberstina [14]

Answer:I wish fewer taxes were spent on health. Although health is an essential part of everyone's life

I feel there are more significant aspects of society that need to be addressed such as the Federal Debt or Veteran's Benefits.

I wish more taxes were spent on public maintenance at parks or any government places, mostly because the bathrooms are always filthy.

Explanation:

5 0
1 year ago
Other questions:
  • Banks that offer low interest rates to people with good credit
    10·2 answers
  • At Milton farms, where a large part of the management comes from the same sociocultural background, many employees of diverse et
    5·1 answer
  • Psychographic segmentation is based on ________.
    11·1 answer
  • Antonio tries to limit his risk of overexposure to debt by using a ________________ to store a certain amount of value that he t
    15·1 answer
  • The drugstore chain CVS uses loyalty-card data to better understand what consumers purchase, the frequency of store visits, and
    14·1 answer
  • Which analogy best represents the relationship between jobs and careers?
    8·2 answers
  • Accompanying a bank statement for Borden Company is a credit memo for $21,200 representing the principal ($20,000) and interest
    11·1 answer
  • Which of the following is the best definition of a bit?
    8·1 answer
  • Recruitment sources are unlimited; therefore, an organization must decide how to reach the best sources of potential employees.
    10·1 answer
  • A census is a regularly-occurring and official count of a particular population. Census data available at the united states cens
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!