A number of towns in the Massachusetts have begun charging their residents for garbage pickup based on the number of garbage cans filled per week. Brookline decided to increase its per-can price from 10 cents to 20 cents per week. In the first week, the number of cans that were brought to the curb fell from 550 to 525 (although city workers complained that the cans were heavier). 

Brookline's economist ran the numbers, informed the mayor that the demand for disposal was inelastic, and recommended that the city raise the price further to maximize the city's revenue from the program. Six months later, at a price of 30 cents per can, the number of cans has fallen to 125 and Brookline's revenues are down. 

What might have happened?

Answer rating: 100% (QA)

Answer The initial increase in price from 10 cents to 20 cents per can led to a decrease in the numb... View the full answer