Question: Problem 2 ( 5 + 1 5 = 2 0 ) The market demand function of transportation service is D ( G P ) =
Problem
The market demand function of transportation service is where
denote the generalized price which is defined as where is travel cost in
dollar and is travel time in minute. Suppose a transportation investment project reduces
the travel time from minutes into minutes while the travel cost is fixed to be dollars.
How much is the value of time?
Calculate the user's benefit stemming from the project.
Notes: you may use and
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