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Consider a city where the fixed cost of a transit system is $405 per hour. The long-run marginal cost is constant at $1.50 per rider.
Consider a city where the fixed cost of a transit system is $405 per hour. The long-run marginal cost is constant at $1.50 per rider. The demand curve is linear, with a vertical intercept of $15 and a slope of $0.05 per rider. Suppose the city internalizes the externalities from cars, and the willingness to pay for transit increases $5 at each ridership level. What is the new equilibriUm in efficiency? - In efficiency, the price is $_ . the ridership is riders 1- the new transit deficit per rider is i ' i $ per rider
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