Posted by **fred** on Saturday, June 11, 2011 at 5:00am.

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.

## Answer this Question

## Related Questions

- economics - 2. A company is considering building a bridge across a river. The ...
- algebra - You live near a bridge that goes over a river. The underside of the ...
- trig - The high level bridge, a railway bridge that crosses the Oldman River is ...
- algebra - You live under a bridge that goes over a river. the underneath side of...
- algebra - You live under a bridge that goes over a river. the underneath side of...
- Math - trigonometry - A bridge is 70m long. From the ends of the bridge the ...
- algebra - You live near a bridge that goes over a river. The underside of the ...
- Math, Trig - The high level bridge, a railway bridge that crosses the Oldman ...
- Finance - Rock Company acquired land 8 years ago for 2.2 million. Today it is ...
- physics - Shyanne (60 kg) has to walk across a single rope bridge to cross a ...

More Related Questions