The Transportation Authority in Anytown, USA, raised bus fares from $1 to $1.15 on January 1, 2011. The authority's statistics show that the number of passengers riding buses decreased from 672,000 in 2011 to 623,000 in 2012.
a. How much did revenue change?
b. What is the arc elasticity for bus travel in Anytown?
c. The answer to b would be correct if all conditions (except price) remained the same between 2011 and 2012. Can you think of any other changes that would have affected the result?