The Transit Authority (TA)in a metropolitan area operates a subway line that currently carries an average of 6000 passengers per day commuting between the suburbs and downtown. The fare now is $3.00 per ride and the board of the TA is considering raising its price by $0.50 to generate a larger revenue. A study reveals that for each $0.50 increase in fare, the ridership will be reduced by an average of 1000 passengers per day. Using this study, the board determines that, to get maximum profit, the price of the ticket should remain at $3.00. Is this correct? Explain why or why not. Show ALL your work to support your answer
The Transit Authority (TA)in a metropolitan area operates a subway line that currently carries an average of 6000 passengers per day commuting between the suburbs and downtown. The fare now is $3.00 per ride and the board of the TA is considering raising its price by $0.50 to generate a larger revenue. A study reveals that for each $0.50 increase in fare, the ridership will be reduced by an average of 1000 passengers per day. Using this study, the board determines that, to get maximum profit, the price of the ticket should remain at $3.00. Is this correct? Explain why or why not. Show ALL your work to support your answer
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Transcribed Image Text:3. Optimization problem
The Transit Authority (TA)in a metropolitan area operates a subway line that currently carries an average of
6000 passengers per day commuting between the suburbs and downtown. The fare now is $3.00 per ride and the
board of the TA is considering raising its price by $0.50 to generate a larger revenue. A study reveals that for
each $0.50 increase in fare, the ridership will be reduced by an average of 1000 passengers per day. Using this
study, the board determines that, to get maximum profit, the price of the ticket should remain at $3.00. Is this
correct? Explain why or why not. Show ALL your work to support your answer
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