Find the ridership when the price is two dollars

Reference no: EM131175645

One of the most commonly used mathematical models for a demand function in micro-economics is x = Mp^-k where p is the price of a commodity and x is the quantity of the commodity that can be sold. Suppose that M = 4, k = ½ p is the price per ride on a New York City subway, and x is the number of riders per day (in millions).

(a) Find the ridership when the price is two dollars.

(b) Find the drop in ridership if the price is raised to $2.25.

(d) Use the value of x on the straight line to find the approximate drop in ridership if the price is raised to $2.25. This is called the marginal demand.

(e) Find the ratio of the value found in (d) to the change in price.

Reference no: EM131175645

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