ANSWER B
Total Revenue and
total revenues of a firm by calculating the
D
and the resulting TRs for the respective commodities:
a. Case 1. A few years ago, the LRT was increased from P8 to P10. As a result, the number of passengers
regularly riding it decreased by approximately 5% from the previous daily estimate of 100,000. What
can you say about the
D
for LRT? Did daily revenues increase or decrease for the duration of the
hike in LRT fare?
b. Case 2. There was a year when toll gate has been moved from Alabang to Susana Heights and at the
same time, the fee was reduced from P7.75 to P5.50 (specifically for Canlubang – Susana Exit).
Suppose the number of motorists then plying the South Expressway increased from 5,000 to 10,000
per day as a result of the lower toll fee, did the increase in the number of motorists using the
expressway compensate for the reduction in the toll fee? Why or why not?
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