The base case is given below.
- Cost of travel by car (Equation)=
= 2.08
- Cost of travel by bus (Equation)=
= 2.18
- Probability of choosing mode car (Equation)=
= 0.52
- Probability of choosing mode bus (Equation)=
= 0.475
- Proportion of trips by car =
= 5000 0.52 = 2600
- Proportion of trips by bus =
= 5000 0.475 = 2400
- Fare collected from bus =
= 2400 9 =
21600
When the fare of bus gets reduced to 6,
- Cost function for bus=
= 1.88
- Probability of choosing mode bus (Equation)=
= 0.55
- Proportion of trips by bus =
= 5000 0.55 = 2750
- Fare collected from the bus
= 2750 6 =
16500
The results are tabulated in table
|