When a Ride-Sharing Service Implements "Surge" Pricing, Raising All Fares

question 338

Multiple Choice

When a ride-sharing service implements "surge" pricing, raising all fares by 30%, drivers choose to work longer hours and this results in an increase of 40% more rides available. The price elasticity of supply for ride-sharing is _____, and the supply is _____.

• A) 0.75; elastic
• B) 0.75; inelastic
• C) 1.33; elastic
• D) 1.33; inelastic

---

Definitions:

Labor Productivity

A measure of economic performance that calculates the output per unit of labor input, such as output per hour worked.

Human Capital

The collective skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Agricultural Sector

The segment of an economy devoted to the production, processing, and distribution of food, fibers, and other plant and animal products.

Developing Countries

Nations with a lower living standard, undeveloped industrial base, and lower Human Development Index (HDI) relative to other countries.