The Illinois Central Railroad once asked the Illinois Commerce Commission for permission to increase its commuter rates by 20 percent. The railroad argued that declining revenues made this rate increase essential. Opponents of the rate increase contended
that the railroad's revenues would fall because of the rate hike. It can be concluded that:
A. both groups felt that the demand was elastic but for different reasons.
B. both groups felt that the demand was inelastic but for different reasons.
C. the railroad felt that the demand for passenger service was inelastic and opponents of the
rate increase felt it was elastic.
D. the railroad felt that the demand for passenger service was elastic and opponents of the
rate increase felt it was inelastic.
Answer: C
You might also like to view...
Refer to the diagram to the right. According to the? diagram, at what point is aggregate expenditure greater than? GDP?
A.) L B.) J C.) K D.) None of the above.
A monopolistically competitive firm that is profitable in the short run will face competition that will eventually eliminate the firm's profits in the long run. But the firm can stave off competition and continue to earn economic profits if
A) it can lobby the government to establish a price floor for its product. B) it can find new ways to differentiate its product. C) it can move to another country where there is less competition. D) it can successfully sue its competitors for copyright infringement.
An increase in the money supply shifts the LM curve to the right, causing the interest rate to ________ and output to ________, everything else held constant
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
In the United States, periods of deflation
A) primarily occurred during times of war. B) were virtually nonexistent until after 1980. C) only occurred before the Civil War. D) were relatively common prior to 1930.