Suppose There Are Two Parallel Highways Between Two Cities with Approximately

question 137

Multiple Choice

Suppose there are two parallel highways between two cities with approximately equal traffic. What would you expect to happen if the state began charging tolls to drive on one of those highways?

• A)More drivers would drive on the non-toll road, making the toll road less congested.
• B)More drivers would drive on the toll road making the non-toll road less congested.
• C)Traffic would remain evenly divided between the two roads as drivers continuously sought the less-congested route.
• D)Traffic would decrease on both roads.

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Definitions:

Accounting Break-even

The point at which total costs and total revenues are equal, meaning the business is not making a profit or loss.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and loan payments.

Cash Break-even

The point at which a company or project has enough cash flow to cover its operating expenses, without considering profits.

Accounting Basis

The method used to record the financial transactions of a business (e.g., cash basis, accrual basis).