A new bridge is built in your area, which allows you to reach campus much faster. So, instead of making 25 trips per month, now you make 35 trips per month to campus. The time cost of the trip, along with the wear and tear cost of the car decline from $4.75 per trip (before the bridge was built) to $3.75 per trip by using the bridge. Draw your hypothetical demand curve for trips to campus and label these respective costs and trips. Evaluate the benefits in dollars per month using the bridge in terms of change in consumer surplus.

A new bridge is built in your area, which allows you to reach campus much faster. So, instead of making 25 trips per month, now you make 35 trips per month to campus. The time cost of the trip, along with the wear and tear cost of the car decline from $4.75 per trip (before the bridge was built) to $3.75 per trip by using the bridge. Draw your hypothetical demand curve for trips to campus and label these respective costs and trips. Evaluate the benefits in dollars per month using the bridge in terms of change in consumer surplus.

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter7: Consumer Choice And Elasticity

Section: Chapter Questions

Problem 2CQ

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