Question
Seattle Transit Ltd. operates a local mass transit system. The transit authority is a state governmental agency. It has an agreement with the state government
Seattle Transit Ltd. operates a local mass transit system. The transit authority is a state governmental agency. It has an agreement with the state government to provide rides to senior citizens for 50 cents per trip. The government will reimburse Seattle Transit for the cost of each trip taken by a senior citizen.
The regular fare is $2 per trip. After analyzing its costs, Seattle Transit figured that, with its operating deficit, the full cost of each ride on the transit system is $4. Routes, capacity, and operating costs are unaffected by the number of senior citizens on any route.
Required:
b. Which price would Seattle Transit prefer? (Round your answer to 2 decimal places.)
c. Which price would the state government prefer? (Round your answer to 2 decimal places.)
d. If Seattle Transit provides an average of 150,000 trips for senior citizens in a given month, what is the monthly value of the difference between the prices in full capacity?
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started