In many large American cities it is common to witness private motorists pulling up to municipal bus stations and allowing perfect strangers to ride into downtown with them in order to take advantage of the high occupancy vehicle lanes that require
two or more drivers. Using the concept of elasticity of demand and total revenue explain why public transit authorities might be concerned with this practice.
Public transit authorities may be concerned about this practice because it provides a very good substitute for their services and may make municipal bus service more price elastic and could have a deleterious impact on the revenue generated by the public transit system.
You might also like to view...
Use the above figure. Which graph depicts complementary goods?
A) A B) B C) C D) D
Monopolies differ from perfectly competitive firms in the long run because
a. perfectly competitive firms can earn economic profit b. monopolies can earn economic profit c. monopolies produce a smaller share of the industry output d. patents and copyright laws protect monopolists for as long as they desire e. monopolists have long-run average cost curves