Questions: You will have the opportunity to take second attempt as well with similar length of time. The second attempt will have additional 120 minutes to complete the quiz. You may use notes and scrap paper to practice while taking the exam, and the textbook calculator may be used. Do not share your exam with any other students in the class. Best of Luck! Question 1 1 pt If the price elasticity of demand for commuter rail is less than 1, in order to raise revenue to cover the rising cost of providing commuter train service, the authority would - decrease price (the fare) of the commuters - provide more frequent trains for the commuters - increase the fare for the commuters - provide less numbers of trains for the commuters Question 2 1 pts Suppose that the following table shows the weekly visits to an amusement park

You will have the opportunity to take second attempt as well with similar length of time. The second attempt will have additional 120 minutes to complete the quiz. You may use notes and scrap paper to practice while taking the exam, and the textbook calculator may be used. Do not share your exam with any other students in the class. Best of Luck! Question 1 1 pt If the price elasticity of demand for commuter rail is less than 1, in order to raise revenue to cover the rising cost of providing commuter train service, the authority would - decrease price (the fare) of the commuters - provide more frequent trains for the commuters - increase the fare for the commuters - provide less numbers of trains for the commuters Question 2 1 pts Suppose that the following table shows the weekly visits to an amusement park
Transcript text: You will have the opportunity to take second attempt as well with similar length of time. The second attempt will have additional 120 minutes to complete the quiz. You may use notes and scrap paper to practice while taking the exam, and the textbook calculator may be used. Do not share your exam with any other students in the class. Best of Luck! Question 1 1 pt If the price elasticity of demand for commuter rail is less than 1, in order to raise revenue to cover the rising cost of providing commuter train service, the authority would - decrease price (the fare) of the commuters - provide more frequent trains for the commuters - increase the fare for the commuters - provide less numbers of trains for the commuters Question 2 1 pts Suppose that the following table shows the weekly visits to an amusement park
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Solution

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The answer to Question 1 is: increase the fare for the commuters.

Explanation for each option:

  • Decrease price (the fare) of the commuters: This option is incorrect. When the price elasticity of demand is less than 1, demand is inelastic. This means that consumers are not very responsive to price changes. Decreasing the price would lead to a proportionally smaller increase in quantity demanded, thus reducing total revenue.

  • Provide more frequent trains for the commuters: This option is not directly related to price elasticity and revenue. While increasing service frequency might attract more riders, it does not directly address the issue of raising revenue through fare changes.

  • Increase the fare for the commuters: This option is correct. When demand is inelastic (elasticity less than 1), increasing the price will lead to a smaller percentage decrease in quantity demanded, resulting in an increase in total revenue.

  • Provide less numbers of trains for the commuters: This option is also not directly related to price elasticity and revenue. Reducing the number of trains might decrease operational costs but does not directly impact revenue through fare changes.

In summary, when demand is inelastic, increasing the fare is the most effective way to raise revenue.

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