1 If the price of bus tickets drops from 200 to 175 what hap

1. If the price of bus tickets drops from $2.00 to $1.75, what happens to the quantity supplied of city bus tickets?

2. How much does supply change?

3. If the price of gasoline and diesel fuel increase, what would we expect to happen to the supply of bus tickets?

Solution

1. If the price of bus tickets drops from $2.00 to $1.75, the quantity supplied of city bus tickets decreases from 1200 to 750.

2. Supply changes by 450 (i.e. 1200- 750).

3. If the price of gasoline and diesel fuel increase, we would expect the supply of bus tickets to decrease. Because cost will increase