Can you help with parts c,d, and e please? The estimated daily demand for river corssings on a proposed new bridge is: Qd = 100,000 - 20,000P where Qd is the quantity demanded measured in number of daily crossings and P is the price(toll) per crossing in dollars. Engineers estimate that constructing the new bridge will result in a fixed cost of $1.2 billion or $120,000 per day over the life of the bridge. Once constructed, there are no marginal costs and variable costs associated with the bridge's use. Based upon the above information, answer the following questions: a. If a private company were to build the bridge, what would be the profit-maximizing number of daily crossings? b. What price per crossing(toll) would the profit-maximizing company establish? c. What would be the socially optimal number of daily crossings? d. What deadweight loss would exist given your answers to part (a) and (b)? e. Would a profit-maximizing company build the bridge?
Can you help with parts c,d, and e please?
The estimated daily demand for river corssings on a proposed new bridge is:
Qd = 100,000 - 20,000P
where Qd is the quantity demanded measured in number of daily crossings and P is the price(toll) per crossing in dollars. Engineers estimate that constructing the new bridge will result in a fixed cost of $1.2 billion or $120,000 per day over the life of the bridge. Once constructed, there are no marginal costs and variable costs associated with the bridge's use. Based upon the above information, answer the following questions:
a. If a private company were to build the bridge, what would be the profit-maximizing number of daily crossings?
b. What price per crossing(toll) would the profit-maximizing company establish?
c. What would be the socially optimal number of daily crossings?
d. What
e. Would a profit-maximizing company build the bridge?
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