Chapter 1.2, Problem 42E

Equilibrium Price: Mars Monorail Service The demand for monorail service on the Utarek monorail, which links the three urbynes (or districts) of Utarek on Mars, can be approximated by

$q=7.5+\frac{30}{p}$ million rides per day $\left(3\le p\le 8\right)$, where p is the fare the Utarek Monorail Cooperative charges in zonars. $\left(\bar{Z}\right)$.³² Assume that the cooperative is prepared to provide service for

$q=1.2p+7.5$ million rides per day $\left(3\le p\le 8\right)$ at a fare of $\bar{Z}p$.

a. Calculate the equilibrium price and equilibrium demand.

b. Graph the demand and supply functions to confirm your answer in part (a) graphically.

c. Estimate the shortage or surplus of monorail service at the December 2085 fare of $\bar{Z}6$ per ride.