A regional train operator increases the price of its monthly commuter season ticket by 16%, leading to a 12% fall in the quantity of train tickets demanded. Consequently, a rival long-distance bus service running the same route experiences a 24% increase in the demand for its journeys.
Which one of the following combinations of elasticities represents these events?
Price elasticity of demand for train tickets: −1.33-1.33−1.33; Cross price elasticity of demand for bus journeys with respect to train ticket prices: 0.670.670.67
Price elasticity of demand for train tickets: −0.75-0.75−0.75; Cross price elasticity of demand for bus journeys with respect to train ticket prices: −1.5-1.5−1.5
Price elasticity of demand for train tickets: −0.75-0.75−0.75; Cross price elasticity of demand for bus journeys with respect to train ticket prices: 1.51.51.5
Price elasticity of demand for train tickets: −1.33-1.33−1.33; Cross price elasticity of demand for bus journeys with respect to train ticket prices: −0.67-0.67−0.67
256 exam-style questions on AQA A Level Economics 1.3 Price determination in a competitive market, covering 1.3.1 The determinants of the demand for goods and services, 1.3.2 Price, income and cross elasticities of demand, 1.3.3 The determinants of the supply of goods and services, 1.3.4 Price elasticity of supply, 1.3.5 The determination of equilibrium market prices, and 1.3.6 The interrelationship between markets. Each one has a worked solution and a mark scheme showing where the marks go.