econ Assume there is a toll bridge in your city Suppose that if the toll is abolished and crossing the bridge becomes free, there will be 30,000 vehicles crossing the bridge each year with $1 of price increase, the number of vehicles crossing the bridge will drop by 100 each year On the other hand, the city claims that maintenance of the bridge is costly If there is no toll charge, the city would allow no cars to use the bridge with $1 of price increase, the number of vehicles that the city would allow to use the bridge increases by 100 Use the given information to write down the demand and supply functions of the bridge usage (4 Marks) Solve for the equilibrium price and quantity of the bridge usage (4 Marks) Suppose due to the decrease in transportation needs, the demand for the bridge usage decreased by 10 this year Calculate the new equilibrium price and quantity of the bridge usage (6 Marks) Assume the government enforces a toll charge of $100 Use the demand function derived in Part c) and the original given supply function to check if there will be an excess demand or excess supply with the government enforcement If there is, what is the amount (5 Marks) Suppose the toll bridge needs maintenance and repairs, and the supply of the bridge decreases by a half What is the new supply function Combine this new supply function with the demand function derived in Part c) to calculate a new set of equilibrium price and quantity of the bridge usage (6 Marks) Question One Assume there is a toll bridge in your city Suppose that if the toll is abolished and crossing the bridge becomes free, there will be 30,000 vehicles crossing the bridge each year with $1 of price increase, the number of vehicles crossing the bridge will drop by 100 each year On the other hand, the city claims that maintenance of the bridge is costly If there is no toll charge, the city would allow no cars to use the bridge with $1 of price increase, the number of vehicles that the city would allow to use the bridge increases by 100 a) Use the given information to write down the demand and supply functions of the bridge usage (4 Marks) b) Solve for the equilibrium price and quantity of the bridge usage (4 Marks) c) Suppose due to the decrease in transportation needs, the demand for the bridge usage decreased by 10 this year Calculate the new equilibrium price and quantity of the bridge usage (6 Marks) d) Assume the government enforces a toll charge of $100 Use the demand function derived in Part c) and the original given supply function to check if there will be an excess demand or excess supply with the government enforcement If there is, what is the amount (5 Marks) e) Suppose the toll bridge needs maintenance and repairs, and the supply of the bridge decreases by a half What is the new supply function Combine this new supply function with the demand function derived in Part c) to calculate a new set of equilibrium price and quantity of the bridge usage (6 Marks)

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econ Assume there is a toll bridge in your city. Suppose that if the toll is abolished and crossing the bridge becomes free, there will

econ

Assume there is a toll bridge in your city. Suppose that if the toll is abolished and crossing the bridge becomes free, there will be 30,000 vehicles crossing the bridge each year; with $1 of price increase, the number of vehicles crossing the bridge will drop by 100 each year. On the other hand, the city claims that maintenance of the bridge is costly. If there is no toll charge, the city would allow no cars to use the bridge; with $1 of price increase, the number of vehicles that the city would allow to use the bridge increases by 100.

Use the given information to write down the demand and supply functions of the bridge usage. (4 Marks)
Solve for the equilibrium price and quantity of the bridge usage. (4 Marks)
Suppose due to the decrease in transportation needs, the demand for the bridge usage decreased by 10% this year. Calculate the new equilibrium price and quantity of the bridge usage. (6 Marks)
Assume the government enforces a toll charge of $100. Use the demand function derived in Part c) and the original given supply function to check if there will be an excess demand or excess supply with the government enforcement. If there is, what is the amount? (5 Marks)
Suppose the toll bridge needs maintenance and repairs, and the supply of the bridge decreases by a half. What is the new supply function? Combine this new supply function with the demand function derived in Part c) to calculate a new set of equilibrium price and quantity of the bridge usage. (6 Marks)

Question One Assume there is a toll bridge in your city. Suppose that if the toll is abolished and crossing the bridge becomes free, there will be 30,000 vehicles crossing the bridge each year; with $1 of price increase, the number of vehicles crossing the bridge will drop by 100 each year. On the other hand, the city claims that maintenance of the bridge is costly. If there is no toll charge, the city would allow no cars to use the bridge; with $1 of price increase, the number of vehicles that the city would allow to use the bridge increases by 100 . a) Use the given information to write down the demand and supply functions of the bridge usage. (4 Marks) b) Solve for the equilibrium price and quantity of the bridge usage. (4 Marks) c) Suppose due to the decrease in transportation needs, the demand for the bridge usage decreased by 10% this year. Calculate the new equilibrium price and quantity of the bridge usage. (6 Marks) d) Assume the government enforces a toll charge of $100. Use the demand function derived in Part c) and the original given supply function to check if there will be an excess demand or excess supply with the government enforcement. If there is, what is the amount? (5 Marks) e) Suppose the toll bridge needs maintenance and repairs, and the supply of the bridge decreases by a half. What is the new supply function? Combine this new supply function with the demand function derived in Part c) to calculate a new set of equilibrium price and quantity of the bridge usage. (6 Marks)