A company is considering building a bridge across a river. The bridge would cost

Question

A company is considering building a bridge across a river. The bridge would cost $350,000 to build and nothing to maintain. The following table shows the company's anticipated demand over the lifetime of the bridge Price Quantity (Dollars per crossing) (Thousands of crossings) 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0 80 120 160 200 240 280 320 If the company were to build the bridge, its profit-maximizing price would be $ , and it produce the efficient level of output. If the company is interested in maximizing profit, it company incurs a loss, be sure to enter a negative number for profit.) build the bridge because profit would be $ (Note: If the

Explanation / Answer

price quantity TR MR cost profit 4 0 0 0 350000 -350000 3.5 40000 140000 140000 350000 -210000 3 80000 240000 100000 350000 -110000 2.5 120000 300000 60000 350000 -50000 2 160000 320000 20000 350000 -30000 1.5 200000 300000 -20000 350000 -50000 1 240000 240000 -60000 350000 -110000 0.5 280000 140000 -100000 350000 -210000 0 320000 0 -140000 350000 -350000 profit can be maximized at price of $2 and Quantity of 160000 it would not build the bridge as it would incur a loss of -30000

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