Respuesta :
Answer:
True
Explanation:
Price in-elasticity happens when individuals can not possibly shift or change their behaviors or process of Consummation.
In the case of the bus system, people do not have a Better choice from the bus system although the bus system increase bus fares.
If people do not have a better choice or option for there consumption, we say that price elasticity demand for a particular commodity is inelastic .
Answer:
True
Explanation:
Price Elasticity of Demand is responsive change in demand, due to change in price. P(Ed) = % change in demand / % change in price.
Demand can be classified on the basis of : Elasticity & its relationship with Total Revenue [ TR = P X Q] ; as undermentioned :-
- Elastic Demand : P(Ed) > 1, %change in demand > %change in price, Price & Total Revenue are inversely related [ P ↑ TR ↓ , P ↓TR ↑ ]
- Inelastic Demand : P(Ed) < 1, % change in demand < %change in price , Price & Total Revenue are positively related [ P ↑ TR ↑ , P ↓ TR ↓]
As Given : Increase in bus fares (price) lead to increase in total revenue. This implies Price & Total Revenue are directly related. So, Demand for subway bus services is Inelastic.
