Question 2C – Question 5.
How does a public sector organisation which produces different types of related products such as different types of trips with different priced tickets,set prices in order to break even and cover its fixed and operating costs? • Convert everything on the revenue and cost sides to single ticket equivalents.

• Constraints: a single visit ticket cannot be lower than R20 which will be the lowest price and attract the greatest number of commuters.

• As prices increase, the quantities of tickets sold will decrease (relative to the maximum ticket sales) but the variable costs will decrease. • As prices increase, and commuter numbers decline, fewer ferries will need to be commissioned.