4. Problems and Applications Q4 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 Quantity (Dollars per crossing) (Thousands of crossings) 8 0 7 100 6 200 5 300 4 400 3 500 2 600 1 700 0 800 If the company were to build the bridge, its profit-maximizing price would be , and it produce the efficient level of output. If the company is interested in maximizing profit, it build the bridge because profit would be . (Note: If the company incurs a loss, be sure to enter a negative number for profit.) If the government were to build the bridge, it should charge a price of . True or False: The government should build the bridge. True False
4. Problems and Applications Q4 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 Quantity (Dollars per crossing) (Thousands of crossings) 8 0 7 100 6 200 5 300 4 400 3 500 2 600 1 700 0 800 If the company were to build the bridge, its profit-maximizing price would be , and it produce the efficient level of output. If the company is interested in maximizing profit, it build the bridge because profit would be . (Note: If the company incurs a loss, be sure to enter a negative number for profit.) If the government were to build the bridge, it should charge a price of . True or False: The government should build the bridge. True False
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter3: Demand Analysis
Section: Chapter Questions
Problem 9E
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Question
4. Problems and Applications Q4
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:
|
|
Quantity
|
|---|---|
|
(Dollars per crossing)
|
(Thousands of crossings)
|
| 8 | 0 |
| 7 | 100 |
| 6 | 200 |
| 5 | 300 |
| 4 | 400 |
| 3 | 500 |
| 2 | 600 |
| 1 | 700 |
| 0 | 800 |
If the company were to build the bridge, its profit-maximizing price would be
, and it produce the efficient level of output.
If the company is interested in maximizing profit, it build the bridge because profit would be
. (Note: If the company incurs a loss, be sure to enter a negative number for profit.)
If the government were to build the bridge, it should charge a price of
.
True or False: The government should build the bridge.
True
False
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