Answer to Question #186414 in Finance for dave blake

Question

Where m is the median disposable income in the Enfield transport area, £360 per month & the initial price of a train journey into central London is £6. They believe demand to be inelastic and want to change the price to £8.

  Given the figures above, calculate the total change in demand if they were to raise prices to £8 per journey

                                                                                                

Answer 1

A general change in demand is a change in demand caused by a change in price while keeping income constant:

$the total change in demand=(8-6)\times360=720$