The Following Data Show the Relationship Between the Number of Drivers

question 89

Multiple Choice

The following data show the relationship between the number of drivers who leave for work at 8:00 a.m., their average commute time, and their marginal benefit of commuting. $$\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Number of Drivers } \\\text { Who Leave at 8 am }\end{array} & \begin{array} { c } \text { Average } \\\text { Commute Time }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Benefit }\end{array} \\\hline 100 & 30 \text { minutes } & \$ 10 \\\hline 200 & 65 \text { minutes } & \$ 8 \\\hline 300 & 110 \text { minutes } & \$ 4 \\\hline 400 & 170 \text { minutes } & \$ 3 \\\hline 500 & 260 \text { minutes } & \$ 1 \\\hline\end{array}$$ If commuters view highway use as having a price of zero, then one can predict that ______ drivers will leave for downtown at 8:00 am.

• A)500
• B)400
• C)300
• D)200

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Definitions:

Price Effect

The impact on the quantity demanded of a good or service resulting from a change in its price, holding all other factors constant.

Quantity Effect

The change in quantity demanded or supplied of a good or service due to a change in its price.

Price-elastic Demand

A situation where the quantity demanded of a good or service significantly changes in response to changes in its price.

Total Revenue

Total revenue is the total amount of money received by a company from sales of its goods or services before any expenses are subtracted.