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Question: 211 projecting transit ridership as a transit planner your job...

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2.11 Projecting Transit Ridership. As a transit planner your job is to predict ridership and total fare revenue. Suppose the short-run elasticity of demand for com muter rail (over a 1-month period) is 0.60, and the long-run elasticity (over a 2-year period) is 1.60. The current ridership is 100,000 people per day. Suppose the transit authority decides to increase its fares from $2.00 to $2.20. a. Predict the changes in train ridership over a 1-month period (the short run) and a 2-year period (the long run). b. Over the 1-month period, will total fare revenue increase or decrease? What about the 2-year period?
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