A Local Transit Authority Has Just Applied to Its Regulatory

question 51

Multiple Choice

A local transit authority has just applied to its regulatory board for a fare increase on its rail-transit system,arguing that the increase is needed to cover rising costs.A citizen's committee is opposed to the proposed increase,arguing that the company could increase its revenue by decreasing fares.Which of the statements below is correct?

• A)The company thinks that the demand is inelastic,whereas the committee thinks it is elastic.
• B)The company thinks that the demand is elastic,whereas the committee thinks it is inelastic.
• C)Both the company and the committee think that elasticity is unity.
• D)It is possible that both the company and the committee are correct.

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Definitions:

FTC

Stands for the Federal Trade Commission, a U.S. federal agency tasked with protecting consumers and maintaining competition.

Cosign

To sign a legal document alongside another person, taking joint responsibility for the obligation the document entails, such as a loan.

Equal Credit Opportunity Act

A U.S. federal law designed to ensure that all consumers have an equal chance to obtain credit, prohibiting discrimination.

Unauthorized Purchases

Transactions made without the permission of the account holder or beyond the scope of their authority.