A congestion pricing surcharge for all for-hire vehicles traveling through some parts of Manhattan has begun. The surcharge kicked in February 2019, meaning Ubers, Lyfts and other car services driving south of 96th Street in Manhattan will see a $2.75 surcharge. That's on top of the base fares for each company. Yellow cabs will cost an extra $2.50, on top of the long-standing base fare of $5.50 just to get inside the vehicle. "Nowadays, the business is very slow," said M.D. Alam, a New York City taxi driver. "When this kind of thing happens, in the morning time people go to school, they walk blocks and blocks and don't take a cab. So it really affects our business." '

Source article:

https://www.ny1.com/nyc/all-boroughs/news/2019/02/03/congestion-pricing-surcharge-in-nyc-goes-into-effect

• How would you describe the supply curve after the congestion pricing surcharge increase? Did it change? If so, why and how did it change?
• How would you describe the demand curve after the increase in price? Did the demand curve move to the right or left, or shift up or down? Explain.
• Estimate the price elasticity of demand for tourists to NYC; for residents of the City. Do you think fares for "for-hire vehicles" are elastic? Why or why not?
• Price elasticity is determined by the number of substitutes available. In NYC, subways and busses are considered substitutes. What do you think happened to the demand for subway and bus transportation? Explain your answer.