Answer both parts of the following question. a. The San Francisco Chronicle reported that the toll on the Golden Gate Bridge was raised from $2 to $3. Following the toll increase, traffic fell by 5 percent. Based on this information, calculate the arc price elasticity of demand. Is demand elastic or inelastic

Answer :

Answer:

The answer is "0.1".

Explanation:

Formula:

[tex]\text{Elasticity}= \frac{\% \text{volume changes in demand}}{ \% \text{price rise}}[/tex]

Calculating the value of price percent:

[tex]= \frac{(3-2)}{2} \times 100 \\\\= \frac{1}{2} \times 100 \\\\= \frac{100}{2} \\\\=50 \%[/tex]

Calculating the value of quantity change:  [tex]= -5 \%[/tex]

Calculating the value of elasticity:

[tex]= \frac{-5}{50} \\\\ = \frac{-1}{10} \\\\= -0.1[/tex]

Through this convention, the environmental signal is decreased and elasticity =0.1 is achieved until conductivity. Whose comparatively in elasticity is not as high as 1.