The price of crude oil continued to rise. As a result, the petrol and diesel prices also took an upward move. The oil refining companies studied the trend of the price rise in the last two years and reckoned that, though reluctantly, customers submitted to the price rise. However, after an unaffordable petrol price rise, a small class of people shifted from using their personal vehicles to public transport. Moreover, for travelling to short distances, they dropped using petrol run vehicles, and adopted bicycles that became the need of the hour. The oil refining companies studied the price elasticity of demand for petrol in short run and long run. And they reckoned that the short run elasticity for petrol is 0.2. Whereas, the long run elasticity is 0.4. The petrol authority decided to increase the price by 10%.

a. What will be the change in demand when the price of petrol increases by 15%? b. In the long run, will there be a national agenda to find alternatives to petrol/diesel run vehicles if the price increases steadily? Explain. c. What percentage of the oil companies' revenue changes owing to the change in the price rise by 15%? d. Explain the nature of Elasticity of Demand between Car and Bicycle.