Currently, 1600 people ride a certain commuter train each day and pay $16 for a ticket. The number of people q willing to ride the train at price p is q=400 (8-√p). The railroad would like to increase its revenue. (a) Is demand elastic or inelastic at p = 16? (b) Should the price of a ticket be raised or lowered? (a) Choose the elasticity of the demand below. O neither O elastic O inelastic (b) What should the railroad do to increase revenue? O The price should be raised. O The price should be lowered.

Currently, 1600 people ride a certain commuter train each day and pay $16 for a ticket. The number of people q willing to ride the train at price p is q=400 (8-√p). The railroad would like to increase its revenue. (a) Is demand elastic or inelastic at p = 16? (b) Should the price of a ticket be raised or lowered? (a) Choose the elasticity of the demand below. O neither O elastic O inelastic (b) What should the railroad do to increase revenue? O The price should be raised. O The price should be lowered.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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