Homework Help: economics

Posted by tianbai on Tuesday, November 13, 2007 at 8:39am.

2. A company is considering building a bridge across a river. The bridge would cost $2 million to build and nothing to maintain. The following table shows the company’s anticipated demand over the lifetime of the bridge:

Price per crossing ($) 8 7 6 5 4 3 2 1 0
Number of crossings (‘000) 0 100 200 300 400 500 600 700 800

a. If the company were to build the bridge, what would be its profit-maximizing price? Would that be the efficient 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?
d. Should the government build the bridge? Explain your answer.

economics - SraJMcGin, Tuesday, November 13, 2007 at 10:12am
Thank you for using the Jiskha Homework Help but by now you know what is missing.
economics - Anonymous, Thursday, March 22, 2012 at 11:31pm
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