Early in 2023, the Southeastem Transportation Authority (STA) a public agenoy responsbie for serving the commuter rail transportation needs of a Eastem city, was foced with rising defiots on its system. Also, because of a fiscal austerily program at both the federal and state levels, the hope of receiving additional subsidy support was slin. The board of directors of STA asked the system manager to exploce alternatives to alleviate the financial plight of the system. The first suggesbon made by the manager was to instbute a major cutback in service. This cutback would result in no service atter 7,00p.m, no sorvice on weekends, and a reduced schedule of service during the middoy period Monday through Fiday. The STA board indicated that this alernative was not likely to be politically acceptable and could oniy be considered as a last resort. The board suggested that because it had been over five years aince the last tare incroase, a fare increase from the current level of 51.00 to a new level of $1.25 should be considered. Accordingly. the board ordered the manager to conduct a study of the likely impact of this proposed fase hike. The system manager has collected data on important variables thought to have a significant impact on the demand for tides on STA. These cata have been collected orer the past 26 years and include the following wariables. Price per ride (in cents): This variable is designated X1 in the following data table. Population in the metropoitan area serviced by STA (in thousands): This variable is designated X2 in the table below. Disposable per capita income (in dollars): This variable is desjgnated X3 in the table below. Parking rate per hour in the downtown area (in cents): This variable is designated X4 in the table below. Price Disposable 1. What is the deperdert variable in this demand stwy? What are the ndependent variabies? What are the espected sigh of the indepandert varables? 2. Using Eixcel (or simior soreadsheat softhare). estimate the coeficients of the demand model for the data in the inble above. White the estmated equation in the form y=a+b1x1+b22+b3x3+b4x+ (a) If pice per rale increases by 10 cents? (b) if poputaton rereases by 1,000 ? (c) if incorne inereases by 5100 ? (d) if the parking rate increases by to certa? Early in 2023, the Southeastem Transportation Authority (STA) a public agenoy responsbie for serving the commuter rail transportation needs of a Eastem city, was foced with rising defiots on its system. Also, because of a fiscal austerily program at both the federal and state levels, the hope of receiving additional subsidy support was slin. The board of directors of STA asked the system manager to exploce alternatives to alleviate the financial plight of the system. The first suggesbon made by the manager was to instbute a major cutback in service. This cutback would result in no service atter 7,00p.m, no sorvice on weekends, and a reduced schedule of service during the middoy period Monday through Fiday. The STA board indicated that this alernative was not likely to be politically acceptable and could oniy be considered as a last resort. The board suggested that because it had been over five years aince the last tare incroase, a fare increase from the current level of 51.00 to a new level of $1.25 should be considered. Accordingly. the board ordered the manager to conduct a study of the likely impact of this proposed fase hike. The system manager has collected data on important variables thought to have a significant impact on the demand for tides on STA. These cata have been collected orer the past 26 years and include the following wariables. Price per ride (in cents): This variable is designated X1 in the following data table. Population in the metropoitan area serviced by STA (in thousands): This variable is designated X2 in the table below. Disposable per capita income (in dollars): This variable is desjgnated X3 in the table below. Parking rate per hour in the downtown area (in cents): This variable is designated X4 in the table below. Price Disposable 1. What is the deperdert variable in this demand stwy? What are the ndependent variabies? What are the espected sigh of the indepandert varables? 2. Using Eixcel (or simior soreadsheat softhare). estimate the coeficients of the demand model for the data in the inble above. White the estmated equation in the form y=a+b1x1+b22+b3x3+b4x+ (a) If pice per rale increases by 10 cents? (b) if poputaton rereases by 1,000 ? (c) if incorne inereases by 5100 ? (d) if the parking rate increases by to certa
