Economics (AS & A Level) · Oct / Nov 2023 · Paper 13 · Question 12

In a town, bus fares fall by 50% and this leads to an increase in bus use by 30%. The effect on car use is very low with only a 1% reduction. What is the value of the cross-elasticity of demand between car travel and bus travel?

1. A–0.60
2. B–0.02
3. C+0.02
4. D+0.60

As printed in the paper