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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
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 per Crossing # of crossings, in Thousands
$8 0
7 100
6 200
5 300
4 400
3 500
2 600
1 700
0 800
a. If the company were to build the bridge, what would be its profit-maximizing price? Would that be the efficient level of output? Why or why not?
b. If the company is interested in maximizing profit, should it build the bridge? What would be its profit or loss?
c. If the government were to build the bridge, what price should it charge?
d. Should the government build the bridge? Explain.
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