Math  /  Data & Statistics

Question3. The San Francisco Chronicle reported that the toll on the Golden Gate Bridge was raised from $4\$ 4 to $6\$ 6. Following the toll increase, traffic fell by 10 percent. Stephen Leonoudakis, chairman of the bridge's finance auditing committee, expected that the toll increase could cause toll revenues to increase. Is this statement consistent with economic theory? (2)

Studdy Solution
Yes! Even though traffic fell, the toll increase *did* increase the total revenue.
The chairman's statement *is* consistent with economic theory.
Raising the price while lowering demand can still increase revenue if the price increase is large enough.

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