1: Given that the value of time is $1.5 per minute, justify the proposal. 2: To what value of the construction cost would the proposal become justified? City A has a travel demand function q2.0 x 106 – 5000t, and road performance functionI|t1= 50 + 8 x 10-5q, where t is in minutes. There is a proposal to expand the road such thatthe road performance function will become t230 + 5 x 10-5q, with a construction cost%3Dof $9.6 x 107.

Demand function : q = 2*106 - 5000t Performance function : t1 = 50 + 8*10-5q

Answered: City A has a travel demand function q =…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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City A has a travel demand function q = 2.0 x 106 – 5000t, and road performance function 50 + 8 x 10-5q, where t is in minutes. There is a proposal to expand the road such tha %3D the road performance function will become t2 = 30 + 5 x 10-59, with a construction cos of $9.6 x 107.