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    Dulles Toll Road Elasticity

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    The year is 2007, and the price elasticity of driving on the Dulles Toll Road is 1.6. The owners of the Dulles Toll Road raise the cost of a one way trip to $8.50. The revenue from the toll increase is not as large as the owners forecasted. Should they have set a lower or higher toll?
    Higher, because demand is elastic
    Lower because demand is inelastic
    Lower, because demand is elastic
    Higher, because demand is inelastic.

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    Solution Summary

    The solution determines the road elasticity for Dulles Toll Road.