This paper presents an analysis of the economic feasibility of a demand-responsive transportation system employing driver-operated vehicles on existing street networks. The system is designed to meet the general public transportation needs of a suburban community. The analysis follows traditional economic theory in developing demand and supply curves for the transportation service as a consumer good, followed by an investigation of the equilibrium between demand and supply under various market conditions. Cost models specifically applicable to a transportation service with demand-responsive attributes are formulated to calculate the system supply functions, and an attitudinal survey is employed to generate estimates of demand in the case study community. The demand and supply equilibrium situations are investigated with respect to funding alternatives and sensitivity to changes in supply and demand variables.