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The Troll Road Company is considering building a toll road. It estimates that its linear demand curve is as shown below in the table. Assume
The Troll Road Company is considering building a toll road. It estimates that its linear demand curve is as shown below in the table. Assume that the fixed cost of the road is $0.5 million per year. Maintenance costs, which are the only other costs of the road (see the table) Tolls per trip, USD 0,9 0,8 0,7 0,6 0,5 Number of trips per year (in millions) 2 3 4 5 6 Maintenance cost per year (in 0,7 1,2 1,8 2,9 4,2 6 millions) Compute the profit-maximizing level of output and what price will the company charge in this point? 4maxprofit = Pmaxprofit = What is profit (in millions)at the profit-maximizing output level? Profit
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