If most passenger trains operate far below full capacity and demand is ____, reducing travel fares would be likely to increase total revenue.
A)inelastic
B)unit elastic
C)unit inelastic
D)elastic

Question

If most passenger trains operate far below full capacity and demand is ____, reducing travel fares would be likely to increase total revenue.
A)​inelastic
B)​unit elastic
C)​unit inelastic
D)​elastic

Quizplus · Accepted Answer

If demand is elastic, reducing fares would lead to an increase in the quantity demanded, resulting in an increase in revenue. This is because the increase in the number of passengers would more than offset the decrease in fares, resulting in a net increase in revenue.

If Most Passenger Trains Operate Far Below Full Capacity and Demand