The Price of a Bus Ride Decreases, and the Total

question 154

Multiple Choice

The price of a bus ride decreases, and the total revenue of the bus company decreases. The demand for bus rides is

• A) perfectly elastic.
• B) inelastic.
• C) unit elastic.
• D) elastic but not necessarily perfectly elastic.

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Definitions:

Short-Run Cost Curves

depict the total cost, average cost, and marginal cost of production for a firm in the short run, where at least one input is fixed.

Minimum Price

The lowest price at which a product can be sold, often regulated by law to cover costs and protect producers or consumers.

Marginal-revenue Curve

A graphical representation that shows how marginal revenue varies as the quantity of output is changed.

Market Demand

The total quantity of a good or service that consumers are willing and able to purchase at various prices during a specific time period.