If city officials expect that an increase in bus fares will raise mass transit revenues, they must think that the demand for bus travel is
A)elastic
B)unit elastic
C)inelastic
D)perfectly inelastic
E)-10

Question

Quizplus · Accepted Answer

If city officials expect an increase in bus fares to raise mass transit revenues, it indicates they believe that the demand for bus travel is inelastic. This means that even if the price of bus travel increases, people will continue to use the service because they have no other alternative or the alternatives are impractical or too expensive.

If City Officials Expect That an Increase in Bus Fares