A particular road is used by N drivers each day. Each driver obtains a benefit v from the journey and incurs a cost c(N) that increases with the number of drivers on the road due to congestion. Suppose that the cost incurred is given by c(N) = a + bN, for some positive numbers a, b. If the agent decides not to use the road, they receive 0. You may assume throughout that the number of drivers N can be any real number (rather than an integer). Each driver uses the road at most once. (ii) Show that the number of drivers that join the road is V - a Ne

A particular road is used by N drivers each day. Each driver obtains a benefit v from the journey and incurs a cost c(N) that increases with the number of drivers on the road due to congestion. Suppose that the cost incurred is given by c(N) = a + bN, for some positive numbers a, b. If the agent decides not to use the road, they receive 0. You may assume throughout that the number of drivers N can be any real number (rather than an integer). Each driver uses the road at most once. (ii) Show that the number of drivers that join the road is V - a Ne

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

2ii

A particular road is used by N drivers each day. Each driver obtains a benefit v from the journey and
incurs a cost c(N) that increases with the number of drivers on the road due to congestion. Suppose that
the cost incurred is given by
c(N) = a + bN,
for some positive numbers a, b. If the agent decides not to use the road, they receive 0. You may assume
throughout that the number of drivers N can be any real number (rather than an integer). Each driver
uses the road at most once.
(ii) Show that the number of drivers that join the road is
V — а
Ne =

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