Table 2 shows passenger journeys and average fares for two firms operating electric buses on the same route. Fig. 5 shows the route, including a new housing...
Question 1 Report
Table 2 shows passenger journeys and average fares for two firms operating electric buses on the same route. Fig. 5 shows the route, including a new housing development. GreenRide has asked the transport authority for permission to add buses at peak times. BlueBus states that too many buses could cause congestion and raise its labour and fuel costs. The authority must decide whether more services would improve the market for consumers. It has used the following data from ticket machines over one month.
| Firm | Passenger journeys per month | Average single fare ($) |
|---|---|---|
| GreenRide | 48 000 | 1.60 |
| BlueBus | 36 000 | 1.90 |
(a) Which firm charges the lower average fare? [1]
(b) Calculate the difference in monthly passenger journeys between the two firms. [2]
(c) Explain two likely effects on consumers if GreenRide is allowed to increase the number of buses on the route. [5]
Answer Details
(a) GreenRide charges the lower average fare, $1.60. [1]
(b) \[48000-36000=12000\] The difference is 12 000 passenger journeys per month. [2]
(c) More GreenRide buses would increase frequency, reducing waiting times. It could provide more capacity and less overcrowding, and improve access to the new housing development. Stronger competition may also lead BlueBus to reduce fares. Any two explained effects gain credit. [5]
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