The bus company in Detroit found that when it reduced its price in order to get more people to use the bus—and more people did—the bus company's total revenue still remained the same. Why did they get this surprising result?
a. The demand curve was horizontal, reflecting a price elasticity of zero.
b. The demand curve was vertical, reflecting a price elasticity of zero.
c. The demand curve
shifted to the right.
d. The price elasticity within the range of price-before-the-cut and price-after-the-cut was unit elastic.
e. The price cut was insufficient. A deeper cut would have increased total revenue.
D
Economics
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The United States is a country with a high saving rate
Indicate whether the statement is true or false
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Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y2. C. P3 and Y1. D. P2 and Y3.
Economics