A mass transit authority charges bus fares of $1.25 during morning rush hours but only $1.00 during late morning non-rush hours. Economists explain the fare difference by the fact that the demand for bus rides during the morning rush hours is ________, but during the late morning it is ________.
A) more elastic; more inelastic
B) perfectly elastic; perfectly inelastic
C) more inelastic; more elastic
D) unit elastic; relatively inelastic

Question

Quizplus · Accepted Answer

The demand for bus rides during morning rush hours is more inelastic because people need to get to work or school and have fewer alternatives, making them less sensitive to price changes. During late morning, demand is more elastic because people have more flexibility in their schedules and can more easily adjust their plans based on fare prices, making them more sensitive to price changes.

A Mass Transit Authority Charges Bus Fares of $1