Mia Have Been Hired by the City Council to Determine

Essay

Mia have been hired by the city council to determine whether or not an increase in the price of tickets for the mass transit system would raise system revenues. The debate has been heated and the city council is divided. One side argues that in order to increase revenues from the transit system, prices must be increased. The opposing side argues that a price increase at this time will lower revenues. What assumptions are each side making about the price elasticity of demand, and how should Mia determine the best course of action?