{( .d17% 8:33 PM 0/2 service over riding the bus because of convenience and time

Question

{( .d17% 8:33 PM 0/2 service over riding the bus because of convenience and time issues, but taxi service costs quite a bit more. Suppose taxi fares fall. Based on this scenario, which of the following statements is accurate? Select all that apply Select all that apply: Bus service is an inferior good, so demand for bus rides decreases Bus service is a normal good, so demand for bus rides increases Customers will substitute more bus rides for taxi rides. Consumers will substitute taxi service for bus rides.

Explanation / Answer

Answer to the question is as follows:

Since we have given why taxi rides are preferred over bus rides, and the fact that taxi rides are costly, an action which makes taxi rides cheaper will only substituion of bus rides by taxi rides. Also, Inferior Good are those whose demand decreases when income increases, nothing like this has been expressed.

So, options A, B and D are not the answers.

C is correct.

Demand of taxi will increase, and that of bus ride will decrease

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