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The demand for Greyhound Bus tickets () is given as follows: Q Bus = 500 - 3*P Bus + 15*P Gas - 5*Income where P
The demand for Greyhound Bus tickets () is given as follows:
QBus= 500 - 3*PBus+ 15*PGas- 5*Income
where PBusis the price of a Greyhound Bus ticket (in $),PGasis the price of gasoline in $ per gallon, and "Income"is consumers' yearly income (in thousands).
You are given the following information:
- The current price of a bus ticket is $10.
- The current price of of a gallon of gas is $2/gallon
- Average income is 20 thousand dollars per year.(Hint:use 20not 20,000if/when needed)
Answer the following questions. Insert one value, phrase, or equation in each blank.
- What is the equation of demand in terms of only the price of bus tickets and the quantity of bus tickets? Enter an equation.
- What is the cross-price elasticity of bus tickets and gasoline? Enter one value.
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