Recently a Railroad Asked the State Commerce Commission for Permission

question 35

Multiple Choice

Recently a railroad asked the state commerce commission for permission to increase its commuter rates by 20 percent.The railroad argued that declining revenues made this rate increase essential.Opponents of the rate increase contended that the railroad's revenues would fall because of the rate hike.It can be concluded that:

• A)the railroad felt that the demand for passenger service was elastic and the opponents of the rate increase felt it was inelastic.
• B)the railroad felt that the demand for passenger service was inelastic and the opponents of the rate increase felt it was elastic.
• C)both groups felt that the demand was inelastic but for different reasons.
• D)both groups felt that the demand was elastic but for different reasons.
• E)both groups felt that the demand was inelastic for the same reason.

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Definitions:

Usage Barrier

The factors that hinder a consumer from adopting or continuing to use a product or service.

Reluctant

Hesitant or unwilling to take a particular action due to doubt or uncertainty.

Product Adoption

The process by which consumers start using a new product or technology, often influenced by factors like ease of use, benefits, and peer adoption.

Psychological Barriers

Mental or emotional obstacles that hinder individuals from achieving goals, making decisions, or communicating effectively.