Two separate groups of people use Boston buses and are charged different fares depending on the time of day. One group uses them only during rush hour and has little or no alternatives to travel to and from work. The other group uses them only during mid-day for non-work related activities and have many other alternatives. The city of Boston is under political pressure to lower transit fares. You have been requested to structure the reduced fares in such a manner that either minimizes or actually increases revenue for the city. Between the two groups, which group would you recommend that the fares be reduced more than the other group? Explain.
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One group has inelastic demand and another with options has elastic demand, so economically raise fares for group with inelastic demand i.e. the office-goers. that will increase revenue.
I'm not in Boston,and I won't do it without free lunch. But a tip, just raise a fair where it is inelastic.