A. The Delaware River Joint Toll Bridge Commission increased the toll on the bridges on Route 22 and Interstate 78 from New Jersey to Pennsylvania from $0.5 to $1.0. Use the information in the following table to answer the questions.(Assume that besides the toll change, nothing occurred during the months that would affect consumer demand).

Number of Vehicles Crossing the Bridge

Month Toll Route 22 Bridge Interstate 78 Bridge

Nov $0.50 519,337 728,022

Dec 1.00 433,691 656,257

a.Calculate the price elasticity of demand for each bridge, using the midpoint formula.

b.How much total revenue did the commission collect from these bridges in November? How much did it collect in December? Why the revenue has increased?

B.Briefly explain whether each of the following statements is true or false.

a.If the demand and supply for a product both increase, the equilibrium quantity of the product must also increase

b.If the demand and supply for a product both increase, the equilibrium price of the product must also increase

c.If the demand for a product decreases and the supply of the product increases, the equilibrium price of the product may increase or decrease, depending on whether supply or demand has shifted more.