When a public transit system (such as a subway or bus line)raises its fares,its total revenue may increase.This suggests that demand is:
A)unstable.
B)price-inelastic.
C)price-elastic.
D)price unit-elastic.

Question

Quizplus · Accepted Answer

If the total revenue of a public transit system increases after raising its fares, it means that the demand is price-inelastic. This implies that even if the fares are increased, the demand for the service will not decrease significantly. In other words, the consumers are not very sensitive to the price change, and the demand for the service continues to remain high.

When a Public Transit System (Such as a Subway or Bus