If tolls on a toll road can be raised significantly before commuters will consider using a free alternative, demand for using the toll road must be
A) inelastic.
B) elastic.
C) unit elastic.
D) perfectly elastic.
Answer: A
You might also like to view...
The figure above shows that the deadweight loss from the tariff is
A) $20 million per year. B) $30 million per year. C) $15 million per year. D) $55 million per year. E) zero.
A perfectly competitive firm's supply curve is its
A) marginal cost curve above its minimum average fixed cost. B) marginal cost curve above its minimum average total cost. C) marginal cost curve. D) marginal cost curve above its minimum average variable cost.
In the short run, the supply of a resource will generally be
a. less elastic than in the long run. b. more elastic than in the long run. c. equally elastic as the supply of the resource in the long run. d. inversely related to the elasticity of demand for the product that the resource helps produce.
All else equal, the price elasticity of demand for a good tends to be lower:
A. in the long run. B. if the good represents a large share of a consumer's budget. C. if the good has few close substitutes. D. if the good has many close substitutes.