Homework: Homework 4 Score: 0 of 2 pts HW Score: 56 67%, 17 of 30 pts | End of C

ID: 1162362 • Letter: H

Question

Homework: Homework 4 Score: 0 of 2 pts HW Score: 56 67%, 17 of 30 pts | End of Chapter 3.12 Question Help The Delaware River Joint Tll Bridge Commission increased the tollon the bwidges on Route 22 and Interstate 78 from New Jersey to Pennay?vania from so 55 to $1.05 Use the information in the table below to answer the questions (assume nothing other than the toll change accurred during the months that would affect customer demand) Source: Garrett Therolt, "Frugal Drivers Flood Free Bridge," (Alentown, Pennsylvania) Morning Call, January 20, 2003. NUMBER OF VEHICLES CROSSING THE BRIDGE ??? Month November December 510.224 426,040 721,001 649,860 $1.05 Using the midpoint formula, for the Route 22 Bridge, the price elasticity of demand is -029 Enter your response rounded to two decimal places. Be sure to include the minus sign) Using the midpoint formula for the Interstate 78 Bridge, the price elasticity of demand is Enter your response rounded to two decimal places. Be sure to inolude the minus sign.) Enter your answer in the answer box and then click Check Answer remaining Clear Al Check Answer

Explanation / Answer

The midpoint formula,

PED = (Change in No of vehicles)/(average of vehicles)/(Change in Toll prices)/(average of prices)

=(649860-721001)/((649860+721001)/2)/((1.05-0.55)/((1.05+0.55)/2))

= -0.17

Toll

Route 22 Interstate 78 Bridge

Change in No of vehicles

Change in Toll

PED

Nov

0.55

7,21,001

Dec

1.05

6,49,860

-0.104

0.625

-0.17