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if we assume that a given bus market is in perfect competition which charges a flat fare of $1, and if the formula for the total demand in the market is given by the equation Qd=250-60P
Where Qd is the quantity demanded in thousands at a given price P
a) if the cost per vehicle kilometre is N$ 1.60, avarage utilisation 20 passengers per vehicle kilometre and avarage trip distance 10 kilometres:
1. what is the level of bus kilometre required to service this market?
2. what profit are being made?