Galaxy Railway is the only firm providing train services to a small town. Suppose there is a discovery of a gold mine near the town leading to a sudden surge in the demand for its services from D1 to D2. P D1 D2 Copy the above diagram to your Standard Answer Sheet; explain how the increase in demand will affect the price and output of Galaxy Railway. а. In view of the expensive railway tickets, the Town Government is considering a proposal of providing a lump-sum subsidy to Galaxy Railway. Explain whether this lump-sum subsidy will induce Galaxy Railway to reduce its ticket price. b.

Galaxy Railway is the only firm providing train services to a small town. Suppose there is a discovery of a gold mine near the town leading to a sudden surge in the demand for its services from D1 to D2. P D1 D2 Copy the above diagram to your Standard Answer Sheet; explain how the increase in demand will affect the price and output of Galaxy Railway. а. In view of the expensive railway tickets, the Town Government is considering a proposal of providing a lump-sum subsidy to Galaxy Railway. Explain whether this lump-sum subsidy will induce Galaxy Railway to reduce its ticket price. b.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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