A Local Transit Authority Charges $1 for a Bus Ride

question 210

Multiple Choice

A local transit authority charges $1 for a bus ride. An economics study suggests that in the price range from $0.50 to $1.50, the elasticity of demand for bus trips is 1.1. To increase its revenue, the transit authority should

• A) leave the fare as it is.
• B) raise the fare.
• C) lower the fare.
• D) charge $1.10.

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Definitions:

SST

Sum of Squares Total, a measure used in statistical analysis to quantify the total variance in a dataset.

Randomized Block Design

A statistical experiment design for comparing treatments by randomly assigning them within defined blocks to reduce variation.

Matched Pairs Experiment

A statistical experiment design in which subjects are paired based on certain characteristics, and then alterations are made to only one member of each pair for comparing outcomes.

Randomized Block Design

A statistical experiment design that aims to reduce the effects of variability among experimental units by grouping them into blocks.