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March 29, 2015

Homework Help: Economics

Posted by Stephanie on Monday, December 10, 2012 at 6:31pm.

The total operating revenues of a public transportation authority are $100M while its total operatiing costs are $120M. The price per ride is $1, and the price elasticity of demand for transportation ia -0.4. The transportation authority has to eliminate its operating deficit.
(a)What pricing policy should the transportation authority adopt? Why?

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