Question: Problem 2 ( 5 + 1 5 = 2 0 ) The market demand function of transportation service is D ( G P ) =

Problem 2(5+15=20)
The market demand function of transportation service is D(GP)=100-20GP2 where GP
denote the generalized price which is defined as GP=p+0.5t where p is travel cost in
dollar and t is travel time in minute. Suppose a transportation investment project reduces
the travel time from 20 minutes into 16 minutes while the travel cost is fixed to be10 dollars.
(1) How much is the value of time?
(2) Calculate the user's benefit stemming from the project.
Notes: you may use 22=1.4 and 52=2.2.
Problem 2 ( 5 + 1 5 = 2 0 ) The market demand

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