8. A company is considering building a bridge across a river. The bridge would cost €12 million to build and nothing to maintain. The following table shows the com- pany's anticipated demand over the lifetime of the bridge: Number of crossings (in thousands) Price per crossing (€) €8 7 100 200 300 400 500 600 700 800 a. If the company were to build the bridge, what would be its profit-maximizing price? Would that be the effi- cient level of output? Why or why not? b. If the company is interested in maximizing profit, should it build the bridge? What would be its profit or loss? c. If the government were to build the bridge, what price should it charge for passengers and vehicles to use the bridge? Explain your answer. d. Should the government build the bridge? Explain. 6543210

8. A company is considering building a bridge across a river. The bridge would cost €12 million to build and nothing to maintain. The following table shows the com- pany's anticipated demand over the lifetime of the bridge: Number of crossings (in thousands) Price per crossing (€) €8 7 100 200 300 400 500 600 700 800 a. If the company were to build the bridge, what would be its profit-maximizing price? Would that be the effi- cient level of output? Why or why not? b. If the company is interested in maximizing profit, should it build the bridge? What would be its profit or loss? c. If the government were to build the bridge, what price should it charge for passengers and vehicles to use the bridge? Explain your answer. d. Should the government build the bridge? Explain. 6543210

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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10- O 00 8 7 6 5- 4 M 2 H 05 1 15 2 Supply Demand 25 3 3.5 4 4.5 5 Quantity
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