The market will always try to get an equilibrium between the demand and the

supply. The market will get this equilibrium at a specific price (equilibrium price),
where the quantity (equilibrium quantity) is the same for both demand and
supply. When we are analyzing the demand of a specific good or service we
would like to know how much sensitive the people are of a change in the price,
increase or decrease, we could this measurement elasticity of the demand.
Let us start with the equilibrium in the market, specially in the transport market.
With the demand and supply in equilibrium we will have the equilibrium price
and the equilibrium quantity(pe,qe). This equilibrium point is where the both
curves crosses each other. In this scenario if the price increase then we will have
a supply excess where the transport companies are able to offer more seats, but
the demand will decrease because the people are not able to pay more for the
same service. When the price is under the equilibrium price we will have an
demand excess where more people is able to use more seats, but the transport
companies will decrease their supply because of the price.
Let us talk about the buses transportation and the train transportation. When we
are in the market equilibrium of the buses transportation and the price of the
train tickets increase, more people will be able to uses the bus transport, this
demand excess will produce demand curve moves to the right. At the equilibrium
price we will have more people able to use the buses according to the new curve,
that will produce an increase in the price of the bus tickets until we will get the
market equilibrium. These new equilibrium points price and quantity in the buses
transport market will be higher than those first ones.
Now what happens if the government decides to give a subsidy to the buses
operators. This action will produce the supply curve will move to the right
because the buses operators will be able to supply more seats. This excess of
supply at the equilibrium price will produce the decrease of the price until we will
get the equilibrium again in a new equilibrium point. Where the new equilibrium
price is lower and the new equilibrium point will be upper than the first ones.
Now let us talk about the elasticity of the demand. The elasticity is how much
sensitive the people are because of a price change. So the Price Elasticity
Demand is defined by the percentage change in quantity demand divided by the
percentage change in price.
When the Price Elasticity Demand is <-1 the demand is inelastic, this means the
change in the proportionate quantity demand is lower than the change in the
proportionate quantity price, so the people are not too much sensitive because
of a change in the price.
When the Price Elasticity Demand is >-1 the demand is elastic, this means that
the change in the proportionate quantity demand is more than the change in the
proportionate quantity price, so the people is sensitive because of a change in
the price.
We have the extreme scenarios of this two concepts. When we have a perfect
price inelastic demand it means that it does not matter how much is the change
in the price the quantity demand will be always the same. The other extreme
scenario is called perfect price elastic demand when with a little change in the
price the quantity demand will be zero.

Other concept is called the Unitary Price Elastic Demand this concept says with a
relative change in the price we obtain the same relative change in the quantity
demanded.