Answered: A company is considering building a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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 ( would or would not)? produce the efficient level of output.

If the company is interested in maximizing profit, it (should , or should not)? 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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Problems & Applications (Ch 15)
9.
200
5.
300
400
3.
500
2.
600
1.
700
0.
800
If the company were to build the bridge, its profit-maximizing price would be S
and it
produce the efficient level of
output.
build the bridge because profit would be S
(Note: If the
If the company is interested in maximizing profit, it
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 S
True or False: The government should build the bridge.
O True
O False
合
4.

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