PED a good to a change in its

PED measures the responsiveness of quantity demanded of a good to a change in its own price.It is calculated by taking the percentage change in quantity demanded over the percentage change in price.As singapore has a well-developed public transportation network, Singaporeans have many alternatives or substitutes to driving. They can travel to almost any part of the country by bus, train, or taxi. The Mass Rapid Transport (MRT) currently has 5 lines with around 120 different stations. With another line, containing 26 more stations, under construction, the MRT is one of the main ways Singaporeans can travel around the country. There are also more than 300 different buses available for Singaporeans which cover almost the whole of Singapore.  With booking apps like Uber and Grab also becoming more popular, Singaporeans have a lot of transportation alternatives to driving. Hence, given the availability and accessibility of public transport in Singapore, there are many viable substitutes to travelling by car, and thus private transport is not a necessity but more of a luxury. Since the demand of luxury items is more price elastic, the overall demand for private cars is arguably likely to be price elastic.Moreover, the average income a singaporean earns in 10 years is $310,080. The average cost of owning a car for 10 years is about $121,239.50 including costs like road taxes, car loan, certificate of entitlement (COE) and insurance. Thus, owning a car is about a third of an average Singaporean’s income. If a good forms a large proportion of one’s income, then the demand for the good tends to be more price elastic. Therefore, it can be said that the demand for cars in Singapore is price elastic, as the high costs of owning and using a car takes up a large proportion of an average SIngaporean’s income.However, for a minority of people, public transport is not considered a close substitute, and driving is considered a necessity for them. This is probably due to the fact that they are rich enough to be more than able to afford a car, or perhaps they work in areas which are inaccessible by public transport. Hence, for such people, their demand for cars is less price elastic. Also, for richer Singaporeans, the cost of car ownership and usage forms a smaller proportion of their income so their demand for cars is also less price elastic.