ECN437Exercise5

# ECN437Exercise5 - ECN437 Exercise5 DueMonday2/27...

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ECN437 Exercise 5 Due Monday 2/27 Imagine that you work for an economic consulting company and have been  asked evaluate a proposed bus system for a small city. You are given the  following pieces of information: There are 10,000 people who would use the bus system; Each person has an identical willingness to pay for bus trips given by the  following equation: P=A - B*Qi , where Qi is the number of trips taken by  individual i and A and B are constants that are the same across all  individuals; The marginal cost of a bus trip is \$1 (per person); An experimental study of bus ridership by three randomly-chosen  individuals has been conducted. Each individual was charged a different  price and the number of times he or she rode the bus was observed. The  results were as follows: person 1 was charged \$1 per ride and took 18 trips,  person 2 was charged \$0.50 per ride and took 19 trips, and person 3 was

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