Essay
Demand Curve Analysis. The Badger Bus Company is a regional bus line providing service between Milwaukee, Wisconsin and Chicago, Illinois. An analysis of the monthly demand for service has revealed the following demand relation:
Where Q is quantity measured by the number of passengers per month, P is the price ($), PC is a price index for connecting bus routes (1992 = 100.), BAI is a business activity index (1992 = 100) and S, a binary or dummy variable, equals 1 in summer months, zero otherwise.
A. Determine the demand curve facing the bus service during the winter month of February if P = $40, PC = 120, BAI = 175, and S = 0.
B. Calculate the quantity demanded and total revenues during the summer month of August if all price-related variables are as specified above.
Correct Answer:
Verified
Correct Answer:
Verified
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