Gemroad company, which is a construction company in Slovenia, is considering building a bridge across the Vipava river. The bridge would cost $ 2 million to build and nothing to maintain (e.g., marginal cost is zero). Below is the company forecasted demand over the lifetime of the bridge:

Table#1

Price per crossing($) Number crossing(in 1000)

$8 0

$7 100

$6 200

$5 300

$4 400

$3 500

$2 600

$1 700

$0 800

a.If the company Gemroad will build the bridge, and is interested in maximizing profit, what would be its price, output and profit? Would that be the efficient level of output? Explain

b.If the government were to build the bridge, and delivers the socially efficient outcome, what price should it charge? Should the government build the bridge? Explain. Perform a welfare analysis (with words + graph) in the case when the government builds the bridge.