Question: Within certain limits, a trucking company has a demand function connecting volume (Q) and price per ton (P) as follows: Q=50003P where Q is tons/day

Within certain limits, a trucking company has a

Within certain limits, a trucking company has a demand function connecting volume (Q) and price per ton (P) as follows: Q=50003P where Q is tons/day and P is the price (dollars/ton). Suppose the current price is $1200 per ton, the manager has the following options to increase the total revenue: (1) attracting additional shippers by rescheduling and rerouting the service and thus changing the demand function to Q=70004P, or (2) encouraging more shippers on to the system by reducing the fare from $1200 to $1000. What option would you advise the manager to adopt, giving good reasons for doing so

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