Given the utility expression UK aK 004X1 003X2 0025X3 Wh

Given the utility expression UK = aK - 0.04X_1 - 0.03X_2 + 0.025X_3 Where X_1 is the travel cost in cents, X_2 is the travel time in minutes, and X_3 is a measure associated traveler comfort. Part A) Calculate the market shares of the following three travel modes. Show your work Part B) Estimate the effect that a 30% increase in the cost of all five modes will have on modal split. Show your work.

Solution

Solution: given utility equation U_k=a_k-0.04x₁-0.03x₂+0.025x₃                                              .....................1

we calculeted U_k for automobile putting given value of table in eq. 1, then

U_k=-1.5

for tight rail U_k=-0.85

for bus U_k=-1.07

for bike U_k=-1.25

for walk U_k=-2.64                             here negetive sign show varios modes down the market

B]; 30% inc. the cost of all five modes

we calculeted U_k after inc. the cost of five modes

for automobile U_k=-2.46

for light rail U_k =-1.21

for bus U_k =-1.255

for bike U_k =-1.31

for walk U_k =-2.652