Suppose that the number of riders per day on the new york


Suppose that the number of riders per day on the New York City subway system is 4 (million) when the fare is $2.00. Suppose that the ridership will drop to 3.8 (million) when the fare is raised to $2.25. Assuming that the relationship between demand and price is linear:

(a) Find the demand equation

(b) Find the revenue and marginal revenue functions

(c) Graph the revenue function and show that the maximum revenue is at the point where the marginal revenue is zero

(d) Find the price and number of riders that will maximize the total revenue

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Econometrics: Suppose that the number of riders per day on the new york
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