Business, 12.12.2019 04:31 caggh345

The city of animaltown has built a new bridge across the river separating the two halves of the city for use by its residents. it is trying to decide whether to impose a toll and, if so, how much to charge; it would need to collect $28,000 per hour to finance the bridge, but if it collects less than that, it will finance the remainder of the expense from general tax revenues. city planners estimate a local demand curve for hourly use of the bridge to be q = 1,800 – 100p. the bridge will be able to accommodate 2,000 cars per hour without congestion. a. demonstrate which of the two plans is more economically efficient, and explain why. b. suppose that bridge traffic was so great that each car entering the bridge imposed on opportunity cost on other drivers of $5.how might your answer to (a) be affected by this traffic congestion on the bridge?

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The city of animaltown has built a new bridge across the river separating the two halves of the city...