Question

In this chapter, we calculated the likely long-run change in revenue in NYC were to raise mass transit fares from $2.00 to $2.50. Use the same procedure to calculate the short-run impact of this fare hike. This time, use an elasticity of 0.35, which is in the middle of the short-run estimates in the table.

Good	Area of study	Short-run elasticity	Long-run elasticity
Gas	United States	0.26	0.58
	Britain	0.25	0.6
Electricity	US-- New England	0.19	0.33
	US Pacific Coast	0.19	0.25
Oil	US	0.06	0.45
	France	0.07	0.57
	Japan	0.07	0.36
	Denmark	0.03	0.19
Mass Transit	Multi-country	0.2 to 0.5	0.6 to 0.9