This study considers how prices are first set in the private sector using simple, micro-economic models. Second, it considers how prices should be set in the public sector using the theoretical framework of user charges in public finances. Third, we look at how prices are established in the transportation literature, with the highway transportation literature being considered the more relevant. Then how prices are determined in Washington's transportation system, in general, and the ferry system in specific were analyzed. Empirical evidence on Washington's ferry system fares and subsidies were studied as was evidence on the price elasticity of demand for various transportation services. Finally, the impacts of changing the price level for ferry services was considered as were a number of recommendations for pricing policy changes.