(d) Calculate the percentage of the total tax imposed that is: (i) paid by the buyers per unit: (ii) paid by the sellers per unit. 2. A public transport company recently increased the price of its service on a particular high traffic route from 12 to 15 per trip, this resulted in a reduction in the number of commuters from 600 to 580 per day. Use the information above to answer the questions that follow. (a) Calculate the: (bar (x)) percentage increase in the price of its service; (ii) percentage decrease in the number of commuters; (iii) coefficient of price elasticity of demand for its service. (b) Is the demand for the company's transport service price clastic or inelastic? Give a reason for your answer. ria

## Step 1: Calculate the percentage increase in the price of the service.The initial price is .### Formula: ### Calculation: ## Step 2: Calculate the percentage decrease in the number of commuters.The initial number of commuters is 600 and the new number is 580.### Formula: ### Calculation: ## Step 3: Calculate the coefficient of price elasticity of demand for its service.The coefficient of price elasticity of demand ( ) is calculated using the percentage change in quantity demanded and the percentage change in price.### Formula: ### Calculation: ## Step 4: Determine if the demand is price elastic or inelastic.A demand is considered elastic if and inelastic if .### Analysis:Since , which is less than 1, the demand is inelastic.### Reason:The percentage change in quantity demanded is less than the percentage change in price.