n 2019, the Metropolitan Transportation Authority (MTA) in New York City raised the price of a monthly subway pass from 121 to $127. According to an article in the New York Times: "Transit leaders say they need billions of dollars to tackle uge budget deficits and to pay for critical repairs." Price Source: Emma G. Fitzsimmons, "Subway Fares Are Rising Again. But That Won't Solve the M.T.A.'s Crisis," New York Times, February 27, 2019. n order for the MTA's strategy for covering its rising costs to be successful, what must be true about the price elasticity of demand for subway passes? P2 s demand price elastic or price inelastic? P. O A. Inelastic, because a price increase raises revenue. O B. Elastic, because a price increase raises the quantity demanded. O C. Elastic, because a price increase raises revenue. D2 O D. Inelastic, because a price increase raises the quantity demanded. D1 Suppose that the MTA's strategy doesn't succeed. What then must be true about the price elasticity of demand for subway passes? Quantity s demand price elastic or price inelastic? OA. Inelastic, because a price increase lowers revenue. O B. Elastic, because a price increase lowers the quantity demanded. OC. Elastic, because a price increase lowers revenue. O D. Inelastic, because a price increase lowers the quantity demanded.
n 2019, the Metropolitan Transportation Authority (MTA) in New York City raised the price of a monthly subway pass from 121 to $127. According to an article in the New York Times: "Transit leaders say they need billions of dollars to tackle uge budget deficits and to pay for critical repairs." Price Source: Emma G. Fitzsimmons, "Subway Fares Are Rising Again. But That Won't Solve the M.T.A.'s Crisis," New York Times, February 27, 2019. n order for the MTA's strategy for covering its rising costs to be successful, what must be true about the price elasticity of demand for subway passes? P2 s demand price elastic or price inelastic? P. O A. Inelastic, because a price increase raises revenue. O B. Elastic, because a price increase raises the quantity demanded. O C. Elastic, because a price increase raises revenue. D2 O D. Inelastic, because a price increase raises the quantity demanded. D1 Suppose that the MTA's strategy doesn't succeed. What then must be true about the price elasticity of demand for subway passes? Quantity s demand price elastic or price inelastic? OA. Inelastic, because a price increase lowers revenue. O B. Elastic, because a price increase lowers the quantity demanded. OC. Elastic, because a price increase lowers revenue. O D. Inelastic, because a price increase lowers the quantity demanded.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
4
Transcribed Image Text:The graph shows a demand curve for subway passes assuming the MTA's strategy succeeds and a second demand
curve assuming that the strategy fails.
In the figure, the price elasticity of demand for demand curve
is relatively more inelastic.
For each demand curve, indicate the areas representing the revenue the MTA receives following the price increase.
1.) Using the rectangle drawing tool twice, indicate the change in total revenue for demand curve D, when the price
increases from P, to P,. Let "+" indicate an increase in revenue and "-"a decrease in revenue. Label this area either
'D, or 'D, :
2.) Using the rectangle drawing tool twice, indicate the change in total revenue for demand curve D, when the price
increases from P, to P,. Let "+" indicate an increase in revenue and "-"a decrease in revenue. Label this area either
+
'D'or 'D,:
Carefully follow the instructions above and only draw the required objects.
Transcribed Image Text:In 2019, the Metropolitan Transportation Authority (MTA) in New York City raised the price of a monthly subway pass from
$121 to $127. According to an article in the New York Times: "Transit leaders say they need billions of dollars to tackle
huge budget deficits and to pay for critical repairs."
Price
Source: Emma G. Fitzsimmons, "Subway Fares Are Rising Again. But That Won't Solve the M.T.A.'s Crisis," New York
Times, February 27, 2019.
In order for the MTA's strategy for covering its rising costs to be successful, what must be true about the price elasticity of
demand for subway passes?
P2
Is demand price elastic or price inelastic?
P.
O A. Inelastic, because a price increase raises revenue.
O B. Elastic, because a price increase raises the quantity demanded.
O c. Elastic, because a price increase raises revenue.
D2
O D. Inelastic, because a price increase raises the quantity demanded.
Suppose that the MTA's strategy doesn't succeed. What then must be true about the price elasticity of demand for
subway passes?
Quantity
Is demand price elastic or price inelastic?
O A. Inelastic, because a price increase lowers revenue.
O B. Elastic, because a price increase lowers the quantity demanded.
O C. Elastic, because a price increase lowers revenue.
O D. Inelastic, because a price increase lowers the quantity demanded.
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