Suppose the Governor of California Has Proposed Increasing Toll Rates

question 63

Essay

Suppose the governor of California has proposed increasing toll rates on California's toll roads, and has presented two possible scenarios to implement these increases. Following are projected data for the two scenarios for the California toll roads:
Scenario 1: Toll rate in 2012: $10.00. Toll rate in 2016: $22.50
For every 100 cars using the toll roads in 2012, only 81.6 cars will use the toll roads in 2016.
Scenario 2: Toll rate in 2012: $10.00. Toll rate in 2016: $17.50
For every 100 cars using the toll roads in 2012, only 96.2 cars will use the toll roads in 2016.
a. Using the midpoint formula, calculate the price elasticity of demand for Scenario 1 and Scenario 2.
b. Assume 10,000 cars use California toll roads every day in 2012. What would be the daily total revenue received for each scenario in 2012 and in 2016?
c. Is demand under Scenario 1 and under Scenario 2 price elastic, inelastic, or unit elastic. Briefly explain.
(For above questions, assume that nothing other than the toll change occurs during the time frame listed that would affect consumer demand.)

Recognize the roles of different regulatory and enforcement agencies.

Understand the impact of regulation on innovation and competition.

Understand the cultural and societal changes in the United States during the 1950s.

Recognize the key events and figures in the civil rights movement of the 1950s and 1960s.

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Definitions:

Sex Researchers

Specialists who study human sexuality, including behaviors, functions, and processes.

Ethical Concerns

Pertains to moral principles that govern a person's behaviour or the conducting of an activity, especially relevant in areas affecting human well-being.

Covertly

In a hidden or concealed manner; done secretly or without open acknowledgment.