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Explain why the mayor’s estimate of a one-third loss of revenue is likely t
Explain why the mayor- estimate of a one-third loss of revenue is likely to be an overestimate 1. Skyscraper City has a subway system, for which a one-way fare is $1.50. There is pressure on the mayor to reduce the fare by one-third, to $1.00. The mayor is dismayed, thinking that this will mean Skyscraper City is losing one-third of its revenue from sales of subway tickets. The mayor- economic adviser reminds her that she is focusing only on the price effect and ignoring the quantity effect. Explain why the mayor- estimate of a one-third loss of revenue is likely to be an overestimate. Illustrate with a diagram. Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help
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20 May 2016
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Explain why the mayor’s estimate of a one-third loss of revenue is likely to be an overestimate
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