The elasticity of demand for trips if a non-toll bridge

Assignment Help Business Economics
Reference no: EM131005193

Suppose you are the administrator in charge of setting the toll for crossing a toll bridge across a river. The current toll is $1 per trip and at that toll 1000 trips per hour are taken across the bridge. (a) If the price elasticity of demand for trips is 2.0, what will happen to the number of trips taken per hour if you raise the toll by 10 percent? How would this affect the total revenue collected per hour? (b) If the price elasticity of demand for trips is 0.5, what will happen to the number of trips taken per hour if you raise the toll by 10 percent? How would this affect the total revenue collected per hour? (c) Other things equal, at the current toll of $1, what do you think will happen to the elasticity of demand for trips if the average incomes of people who use the bridge rises? Explain why. (d) Other things equal, at the current toll of $1, what do you think will happen to the elasticity of demand for trips if a non-toll bridge is built a few miles up the river? Explain why.

Reference no: EM131005193

Questions Cloud

Purely financial transactions are excluded : GDP is designed to measure what is produced or created over the current time period? Why Existing assets or property that sold or transferred, including used items, are not counted? Discuss and explain why the following purely financial transactions ..
Write a vhdl module for an 8-bit accumulator for subtraction : If A = B = 1, the value of the data inputs D are subtracted from the accumulator. If A = 1 and B = o, the value of the data inputs D are loaded directly into the register. If A = o and B = 1, the accumulator should shift right with zero fill. I..
What are the social consequences of this changing technology : What were the most important aspects of the computer and electronics revolution?
The useful life of the equipment is five years : What pretax amounts related to the lease would Werner report in its statement of cash flows for the year ended December 31, 2011?
The elasticity of demand for trips if a non-toll bridge : Suppose you are the administrator in charge of setting the toll for crossing a toll bridge across a river. The current toll is $1 per trip and at that toll 1000 trips per hour are taken across the bridge. If the price elasticity of demand for trips i..
Problem regarding the npv of the new plant : What is the NPV of the new plant? Assume that PC has a 35 percent tax rate.
Write a vhdl module for a 4-bit up-down counter : Write a VHDL module for a 4-bit up-down counter. If En = o, the counter will hold its state.If En = 1, the counter will count up if U = 1 or down if U = o. The counter should also have an asynchronous active-low clear signal ClrN.
Discuss problem-solving techniques : Discuss 3-4 problem-solving techniques. Discuss 2 problem-solving techniques that work best for you. Discuss 1 example of how you used those techniques in the past to help you solve a problem or problems. Discuss 3-4 ways you can improve your problem..
How do these event impact the u.s. today : Why do the deaths of Robin Williams, Michael Jackson, Joan Rivers, Ariel Sharon, Shirley Temple Black and Whitney Houston have such a dramatic impact on American society in the past few years?

Reviews

Write a Review

 

Business Economics Questions & Answers

  The demand curve for haircuts

Where Q is the number of cuts per week and P is the price of a hair cut. Terry is considering raising her price above the current price of $15. Terry is unwilling to raise price if the price hike will cause revenues to fall. Should Terry raise the pr..

  Basil robekins has an idea for a new type of ice cream cone

basil robekins has an idea for a new type of ice cream cone made from candy bars like butterfinger etc.. he thinks his

  Fact that many goods are non traded affect the extent

Elucidate how does that fact that many goods are non traded affect the extent of possible gains from trade.

  Optimal order quantity and the optimal time between orders

The demand for a product is 700 units per week, and the items are withdrawn at a constant rate. The setup cost for placing an order to replenish inventory is $25. The unit cost of each item is $3, and the inventory holding cost is $0.05 per item per ..

  Qremington inc purchases a machine that costs 700000 and

q.remington inc. purchases a machine that costs 700000 and has an approximate d useful life of 10 years a macrs

  Inadvisable to base jurisdiction on foresee ability

Javier is travelling from his home in New York to Dallas, Texas. While driving through Oklahoma, his brakes fail and he is injured in the ensuing crash. Javier wants to sue the maker of his car, Energy-Auto Inc. Energy's headquarters is in New York. ..

  Ramp up your mergers also acquisitions practice

if you were an investment banker, would you ramp up your mergers also acquisitions practice focused on this organization based on these estimates.

  Measure of expected labor productivity growth

Suppose someone else tells you that even if average real wages or average real compensation per hour increase, economic inequality could increase as well. Is this possible? To judge that overall prospects for a motion, what information might you want..

  Optimistic regarding summer sales

Between two production technologies firm can choose a new product line. If it installs expertise 1, it's annually costs.

  Conclude that non-residents must have for swimming at pool

The municipal swimming pool charges lower entrance fees to local residents than to non-residents. Conclude that non-residents must have for swimming at the pool than residents.

  Government puts pressure on producers for heavy equipment

During a war the government puts pressure on producers for heavy equipment, supplies, and services, making each more important.

  Indicate their profit-maximizing quantity

Suppose that a monopoly has fixed costs of $1000 and marginal cost of $100. They face a straight market demand curve that runs from $500 on the price axis to 1000 on the quantity axis. Plot their demand, marginal revenue, marginal cost and average..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd