Sun City's public bus line has been operating at a deficit. The city decides to raise the fare from 50 cents to 75 cents, anticipating enough additional revenue to cover the deficit. What assumption is the city making about price elasticity?

Sun City is assuming demand is price inelastic. This means an increase in revenue would accompany an increase in price.

Economics

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An agribusiness firm that has monopsony power in a local market will buy less product at a lower price from local producers compared to a competitive market outcome.

a. true b. false

Economics

Which of the following statements about perfect price discrimination is false?

A) For the price-discriminating firm, its marginal revenue curve coincides with its demand curve. B) There is no consumer surplus if a firm engages in perfect price discrimination. C) A condition for perfect price discrimination is that it must be costlier to service some customers than others. D) Perfect price discrimination occurs when the seller charges the highest price each consumer would be willing to pay for the product.

Economics