Question

A toll road carries 25,000 vehicles per day. The current toll is $3.00 per vehicle. The traffic volume will decrease by 1250 vehicles/day for every 50 cents of increase in toll. That is: V = 25000 - 1250 (x/50). Toll collected per vehicle in cents will be (300+x), so the Total Revenue, R = V T = V (300+x) (a) Determine the total amount of toll currently collected each day. (2 points) (b) Determine the toll that should be charged per vehicle in order to maximize revenues. (4 points) (c) Determine the traffic volume in vehicles/day after the toll increase and the total amount of toll collected after the toll increase. (4 points)

Answer 1