A Public Transit Company Finds That When It Reduces the Price

Multiple Choice

A public transit company finds that when it reduces the price of a bus ticket, total revenues remain the same. One can conclude from this that:

A) the demand curve is horizontal, reflecting infinite price elasticity.
B) the company sells the same number of bus tickets both before and after the price change.
C) the demand curve for bus tickets must have shifted to the right.
D) the firm is operating in a range of the demand curve that is unit elastic.
E) the price should be lowered further so that a larger quantity can be sold.