Transport economics, cost functions, total cost, and marginal cost
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Cost functions of private car use (use of road infrastructure)
Road's average speed of traffic (v, km/h) depends on traffic volume (q, vehicles/h) as follows:
v = 50 - q/100
Average travel cost (c, EUR/h) is a function of average speed v such as
c = 0,5(3 + 200/v)
a) What is the function of total cost C for road use?
b) Derive the marginal cost function
c) What is the average cost c and marginal cost MC at traffic volume q = 500?
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Question about Transport economics, cost functions, total cost, marginal cost
Cost functions of private car use (use of road infrastructure)
Road's average speed of traffic (v, km/h) depends on traffic volume (q, ...
Purchase this Solution
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