Questionz The Quebec government is planning to build a toll highway connecting new suburban growth areas with Montreal. It must decide whether to build a road with one or two lanes. Suppose that the rst lane begins to get congested at a volume of 10,000 vehicles per day. Each additional 1,000 vehicles reduce the speed of all cars on the lane by 1 km per hour. If the road is twice as wide, congestion kicks in at 20,000 vehicles but now declines by 1 km per hour for each 2,000 additional vehicles. The free-ow speed is 100 kmih. Suppose that the only variable cost on this road is the cost of drivers' time, which they value at $101hour and the length of the road is 50 kilometers. All drivers travel on this full segment. a) Draw and clearly label a graph illustrating the private marginal cost, social marginal cost, and demand curves. Each of your cost curves should be shown for 1 and 2 lanes on the same graph. You do not have to solve for these curves mathematically at this point. b} Now use the information in the problem to ll to create an Excel spreadsheet that lets you ll in a table like the following: Note that because of the kink in the PMC function, the SMC function does not look like the graph we looked at in class. Instead it jumps up for the 10,001 vehicle and then is only slightly steeper than the PMC line. Using the Excel graph capabilities, graph both the PMC and SMC lines against volume (using a scatterplot) c) Suppose that the demand is given by T=11,000-100C. That is, if the cost is 0 there would be 11,000 drivers on this road and for each dollar increase in cost 100 drivers are lost. Using your spreadsheet, determine the equilibrium and