Economics Paper.docx - Economics Paper Student\u2019s Name Institution Affiliation Economics Paper In 2017 Transport for Sydney ran an experiment to see

Economics Paper.docx - Economics Paper Student’s Name...

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Economics Paper Student’s Name Institution Affiliation
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Economics Paper In 2017, Transport for Sydney ran an experiment to see how increases in train fares affected passenger choice of modes of transport. As part of the experiment, they obtained an estimate of the demand function for people travelling on its passenger services from Central Coast into Sydney station. They found that the demand curve is representable by the equation 6 + m/2p Where m is the median weekly disposable income in the Central Coast, (in 2017 this figure was £144 a week) and p is the price of a single journey from any station in the Central Coast to Sydney station (in 2017 this was £8). For an experimental period, Transport for Sydney raised the price for the journey described above from £8 to £10, and used the data to calculate an elasticity, and an estimate of the income and substitution effect. Using the figures above, taking £8 as the original price (p), £10 as the new price (p’) and £144 as the income figure (m) calculate Question 1
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