The city bus system charges lower fares to senior citizens than to other passengers.Assuming that this pricing strategy increases the profits of the bus system,we can conclude that senior citizens must have a _____ demand for bus service than do other passengers.

Question

Quizplus · Accepted Answer

Senior citizens likely have a more elastic demand for bus service, meaning their demand is more sensitive to price changes. By offering lower fares, the bus system can attract more senior citizens whose demand would significantly drop if prices were higher, thus potentially increasing overall profits.

The City Bus System Charges Lower Fares to Senior Citizens