If Tolls on a Toll Road Can Be Raised Significantly

question 147

Multiple Choice

If tolls on a toll road can be raised significantly before commuters will consider using a free alternative, demand for using the toll road must be

• A)inelastic.
• B)elastic.
• C)unit elastic.
• D)perfectly elastic.

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and opportunity costs.

Investment Return

The gain or loss on an investment over a specified period, usually expressed as a percentage of the investment's cost.

Capital Income

Income earned on savings that have been put to use through financial capital markets.

Dividends

Payments made by a corporation to its shareholder members, typically from profits.