Suppose that the inverse demand for San Francisco cable car rides is p = 10- Q/1000, where p is the price per ride and Q is the number of rides per day. Suppose the

objective of San Francisco's Municipal Authority (the cable car operator) is to maximize

its revenues. What is the revenue maximizing price? Suppose that San Francisco

calculates that the city's businesses benefit from tourists and residents riding on the city's

cable cars at $4 per ride. If the city's objective is to maximize the sum of cable car

revenue and the economic impact, what is the optimal price?