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Public Transit Fare Strategy
You are a consultant for a city's public transit authority, which needs to increase its total revenue to cover a budget shortfall. The authority provides you with the following data from a recent fare change: when the fare was $2.50 per ride, average daily ridership was 100,000. After increasing the fare to $3.00 per ride, average daily ridership fell to 70,000. Based on an analysis of this data, what pricing strategy would you recommend to the transit authority to achieve its goal of increasing total revenue? Justify your recommendation.
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