If New York City expects that an increase in bus fares will raise mass transit revenues, it must think that the demand for bus travel is:
A) elastic.
B) unit elastic.
C) inelastic.
D) perfectly inelastic.

Question

Quizplus · Accepted Answer

If an increase in bus fares is expected to increase mass transit revenues, it means that the demand for bus travel is inelastic. This is because even if the fares increase, people will still continue to use the buses as there are no close substitutes for bus travel in the city.

If New York City Expects That an Increase in Bus